We are pleased to confirm, following today's Pre-Budget Report, that earnings from the tariffs will be free of income tax for householders who install systems for their own energy production.

Extract from Chancellor's speech:
"From April, people with a home wind turbine or solar panels who plug their excess power into the national grid, will receive on average £900 a year.
I intend to make this payment tax free."

Extract from Pre-Budget Report:

7.37 Households can also play a part in generating low-carbon energy by installing smallscale renewable electricity generation on site. Feed-in tariffs, worth on average £900 in 2010 for households, will provide a financial incentive to install renewable technologies, allowing homes to generate around half of their own electricity. The Pre-Budget Report confirms that households who use renewable technology to generate electricity mainly for their own use will not be subject to income tax on feed-in tariffs. This will save households paying the basic rate of tax £180 in 2010. If necessary, legislation to ensure this treatment will be introduced with effect from 1 April 2010.

7.38 The Government wants all households to play a part in generating renewable energy. Although feed-in tariffs and the Renewable Heat Incentive will make payments over the life of installations, low-income households may still find it difficult to meet upfront costs. Building on the experience of pilot projects for Pay as You Save financing and Warm Front, the Government will consult next year on measures to help low-income households take advantage of clean energy cash-back.

Fuller details can be found here: www.retariffs.co.uk/Subpages/TaxEtc.html