Solar panel income tax

Dear sir or madam, I am helping my friend to raise an enquiry about tax on income generated from Solar panel. This case is a bit complicated. My friend had bought a property on Sep 2021 in UK. The property transaction was included the solar panel, it’s private resident. However, owing to some legal document issue, EDF energy only ratified my friend ownership of solar panel and changed the Feed-In Tariff (FIT) ownership on 04-May-2023. During time, my friend had occasionally recorded down solar panel meter readings. So he had provided all meter readings to EDF energy on May and Jun 2023. EDF energy had dated back the FIT payments to my friend on Jun & Sep 2023. On Sep 2023, my friend has sold this property together with the solar panel. Below is roughly solar panel generated incomes and my friend electricity consumption during Sep-2021 to 03-2024. The question is per HMRC income from private resident solar panel is tax free unless the income generated is highly excess the electricity consumption, somehow more than 20%. However, my friend only received all FIT payments on June and Sep 2023, the total amounts is covering FIT period from Sep 2021 to Sep 2023, should the 20% comparison be based on total FIT receivables vs electricity consumption of financial year Apr 2021 to Apr 2024? If not, how should my friend calculate and declare to HMRC? Please help to review and comment. Thanks EDF FIT payments 09/09/2021-31/03/2022: £367.40 01/04/2022-12/01/2023: £560.33 (£927.73 received at 05-Jun-2023) 12/01/2023-31/03/2023: £182.30 01/04/2023-11/06/2023: £193.48 (£375.78 received at 19-Jun-2023) 11/06/2023-01/09/2023: £375.47 (£375.47 received at 06-Sep-2023) Total FIT payments received: £1678.98 Electricity consumption 09/2021-03/2022: £238 04/2022-01/2023: £339 01/2023-03/2023: £151 04/2023-06/2023: £140 06/2023-09/2023: £124 09/2023-03/2024: £395 Total electricity consumption from: £1387

Hi,
If you’re using heat solely for personal domestic use, the payments you receive are not chargeable to Income Tax. guidance is at:
Taxation of Renewable Heat Incentives
Thank you.

Dear sir or madam, Thanks for input. However, read through your comment and provided link, those are related to Domestic Renewable Heat Incentive (RHI), but my friend’s scheme was under Feed-in Tariff (FIT). Think it is different. Can you kindly double check and provide input to my questions? The question is per HMRC income from private resident solar panel is tax free unless the income generated is highly excess the electricity consumption, somehow more than 20%. However, my friend only received all FIT payments on June and Sep 2023, the total amounts is covering FIT period from Sep 2021 to Sep 2023, should the 20% comparison be based on total FIT receivables vs electricity consumption of financial year Apr 2021 to Apr 2024? f not, how should my friend calculate and declare to HMRC? Please help to review and comment. Thanks

Hi,
You can see guidance here:
Smart Export Guarantee (SEG): earn money for exporting the renewable electricity you have generated
We cannot comment on the different types of solar panel. For an answer to a question of this nature, you would need to seek professional advice.
Thank you.
 

Dear sir or madam, Thanks for input. Last simple question, my friend only received all FIT payments on June and Sep 2023, the total amounts is covering Feed-in Tariff period from Sep 2021 to Sep 2023. If this income need to pay tax, should this be compared to electric consumption on same period (Sep 2021 to Sep 2023)? Or only compare to electric consumption on financial year 06-Apr-2023 to 05-Apr-2024? Please kindly review and comment. Thanks

Hi Scarlett,
Yes it should reflect the period it covers in full to ascertain if tax is due.
Thank you.