51. Deputy Séamus McGrath asked the Tánaiste and Minister for Finance to increase the €400 tax free allowance to householders who generate renewable energy and supply it to the grid. [46101/26]

Micro-generation of electricity is the small-scale production of electricity by consumers who generate electricity at their own homes for their own consumption and sell the excess electricity produced to the grid.

Section 216D of the Taxes Consolidation Act 1997 provides that profits of up to €400 per year arising to an individual from the generation of electricity from renewable, sustainable or alternative sources of energy at the individual’s sole or main residence for the individual’s own consumption (referred to as the micro-generation of electricity) is exempt from Income Tax, USC and PRSI.

The exempt amount was increased from €200 to €400 per year by section 28 of Finance (No.2) Act 2023. The profits which are exempted are those profits arising from the domestic generation of electricity which is supplied to the national grid. The tax exemption was due to expire on 31 December 2025. Finance Bill 2025 extended the exemption from Income Tax, USC and PRSI for householders for certain profits of up to €400 per annum from the microgeneration of electricity, for a further three years, to 31 December 2028.

The Deputy may wish to note that in advance of last year's Budget, a review of the tax exemption for the micro-generation of electricity was undertaken and included in Chapter 9 of the Tax Strategy Group 25/01 paper on Income Tax - assets.gov.ie/static/documents/TSG_25-01_Income_Tax.pdf.

In designing tax reliefs, there is always a balance to be struck between providing support to as many people as possible, consistent with the overall policy intention behind the measure, and ensuring that there is an appropriate degree of control in the management of limited Exchequer resources.

Decisions regarding taxation measures are usually made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.