MCMANUS HALL
  • Services
    • Limited Company Accounts
    • Taxation Services
    • Self Assessment
    • CIS
    • Registered Charities
    • Xero
    • Growth Management
    • Payroll Services
    • Bookkeeping and VAT
    • Business Consultancy
    • Company Secretarial
  • Cloud Software
  • News
  • Pricing
  • Contact
  • Login
Latest News

Selling power back to the grid

6/23/2023

 
With continuing high electricity prices, now could be a very good time to install solar panels at your property. Unless an expensive solar battery is part of the system, it makes sense to sell excess electricity back to the national grid. Normally such sales are free from tax, but there is an exception.
Exemption rules

The sale of excess electricity – from what is known as microgeneration system – is exempt provided the intention is to match the individual’s own home consumption needs.

·     The system must be installed at or near an individual’s home, e.g. rooftop solar panels; and
·     The amount of electricity generated by the system should not significantly exceed domestic needs – HMRC allow a 20% margin here, so the system can generate 120% of domestic needs before sales to the grid become taxable.

Even if electricity sales to the grid are taxable, they might still be covered by the £1,000 trading allowance. If income exceeds the allowance, a £1,000 deduction can be claimed.

Unless a solar battery is used, around half of the electricity generated may end up being sold back to the grid. Install too large a system and these sales will be taxable. This will extend the typical eight-to-ten-year payback period for solar panels, especially if higher rates of tax are involved.

Smart export guarantee
Larger energy suppliers have to pay for excess electricity that is exported to the national grid under the smart export guarantee (SEG) scheme. Any energy company can be chosen, but care should be taken as rates vary significantly – from 1p/per kWh up to a potential 15p/per kWh. Even higher rates might be available if a variable tariff is chosen.
The best SEG rates are normally only available when the same energy supplier is used to supply electricity.
​
Details of the best SEG available rates can be found here.

Comments are closed.

    ​Archives

    June 2025
    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    November 2024
    October 2024
    September 2024
    August 2024
    July 2024
    June 2024
    May 2024
    April 2024
    March 2024
    February 2024
    January 2024
    December 2023
    November 2023
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    February 2020
    January 2020
    November 2019
    October 2019

Powered by Create your own unique website with customizable templates.
Photos from Pam loves pie, Homedust, wuestenigel, Patrick Cannon Tax Barrister, wuestenigel, Brett Jordan, wuestenigel, raisin_raisin, wuestenigel, SME Loans, Alexandre Prevot, Jirka Matousek, wuestenigel (CC BY 2.0), wuestenigel, Jirka Matousek, moneybright, aronbaker2, foundin_a_attic, QuoteInspector.com, wuestenigel, Kate#2112, Semtrio, Rawpixel Ltd, itmpa, GoSimpleTax, DPP Law, UC Davis College of Engineering, 401(K) 2013, REM Photo ~ Sketchy Internet, Chris Yarzab, focusonmore.com, focusonmore.com, willbuckner, EpicTop10.com, Tony Webster, wuestenigel, B Rosen, London Less Travelled
  • Services
    • Limited Company Accounts
    • Taxation Services
    • Self Assessment
    • CIS
    • Registered Charities
    • Xero
    • Growth Management
    • Payroll Services
    • Bookkeeping and VAT
    • Business Consultancy
    • Company Secretarial
  • Cloud Software
  • News
  • Pricing
  • Contact
  • Login