Private ruling: Income - other - solar panels
Published: May 2012
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Are the payments you receive for reselling excess electricity to the grid assessable income? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-10

Reasons for decision: Summary: Unless otherwise stated, all legislative references in the following detailed reasoning are to the Income Tax Assessment Act 1997 . | Detailed Reasoning - Detailed reasoning: Assessable income is made up of ordinary income under section 6-5 and statutory income under section 6-10. Section 6-10 provides that assessable income includes statutory income which constitutes amounts made assessable by specific statutory provisions. There are no specific legislative provisions relating to money or credits received from electricity suppliers therefore such amounts are not statutory income. Subsection 6-5(1) defines ordinary income as income 'according to ordinary concepts'. Under subsection 6-5(2), the assessable income of an Australian resident includes the ordinary income derived directly or indirectly from all sources during the income year. There is no specific definition of 'ordinary concepts' within the tax legislation, but the character of income received can be determined as ordinary income by considering factors such as whether the income is: · the result of employment, services rendered or carrying on a business · received regularly · expected · relied upon In your case, the amounts received are not the result of employment, services you have rendered or carrying on a business. They are not consistent enough to be received regularly or expected. The scale of these payments would not be enough to reasonably rely upon. Your system is of a private or domestic nature. Therefore, these amounts are not ordinary income. As the amounts you may receive are not ordinary income or statutory income, they are not assessable income and thus you are not required to declare it as such in the financial years this ruling applies to. Note that should the scale and/or frequency of the payments you receive increase significantly, this decision may become subject to review.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You have installed a 2kW Solar Photo-Voltaic system at your residence. | You receive 47 cents per kW hour as a combination of 40 cents per kWh from the State Government's 'Residential Net Feed-in Tariff Scheme' and 7 cents per kWh from your electricity retailer. | This money is used as a credit to offset your electricity consumption. | If your net credit balance exceeds $100, you can request that your electricity retailer pay you the amount outstanding directly. | For the duration of this arrangement, you have claimed one such payment.