Private ruling: Income from solar power system
Published: June 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Will the payment you received from your electricity retailer be included in your assessable income? | A1: No.

Relevant facts and circumstances: You installed a solar power system on your residence to reduce your electricity bills. The home is your private residence and is not used for income producing purposes. The system is 1.52kw domestic solar power system. The arrangement is a net scheme; with the electricity you consume being offset against the electricity which you generate. The system is currently generating more power than you consume. You received a payment from the electricity retailer.

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

Reasons for decision: Summary: Taxation Ruling IT 2167 outlines the circumstances when amounts received will be considered income and when they will be considered to be private or domestic. In considering the facts of your situation it is important to examine the scale of the activity, the terms of the arrangement with the electricity retailer, the regularity of payments received and whether or not there is a realistic opportunity for you to profit from the arrangement. In your case, the payments you receive from the electricity retailer are part of an arrangement that is private or domestic in nature. Having regards to your full circumstances and the factors outlined above, the payment received from the electricity retailer is not considered assessable income.

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.