Solar-energy report seeks scheme to cover upfront installation costs

With challenge comes opportunity and this recently published report, Solar Energy and the Agricultural Industry, outlines the opportunities that can exist for Irish farmers who would like a solar option. But it is not as simple as that.
In addition to the agricultural sector being charged with reducing greenhouse gas (GHG) emissions by 25 per cent by 2030 under legally binding sectoral targets, this report reminds us of additional energy-use targets in agriculture, as per the AgClimatise report ‘whereby a reduction of 20 per cent, along with an additional target of meeting 20 per cent of agricultural energy use by renewables should be achieved by 2030’.
“The adoption and deployment of solar technology on farms has been identified as a key element in meeting these targets given its potential to offset input costs and act as a revenue generator, enhancing family farm incomes,” according to the Oireachtas Committee’s report. However, as the Committee heard during pre-report stakeholder meetings and submissions, ‘less than 2 per cent of dairy farms currently have a solar PV system installed’. The potential exists, but so too do barriers.
Launching the report, its rapporteur, Deputy Matt Carthy – Sinn Féin’s agriculture spokesperson – said that the adoption of on-farm solar-energy-production technology presents an opportunity to both enhance family farm incomes and contribute positively to Ireland's emission-reduction obligations. But, he highlighted, this can only happen if reform is made and the regulatory processes are streamlined, and if the taxation regime is amended to incentivise adoption. In addition to this, a key recommendation of the committee is to explore whether a scheme can be devised that would see all upfront solar PV installation costs offset and repayment methods offered.
Deputy Carthy said: “This report outlines the key areas where reform is required to incentivise and deliver widespread adoption, with a primary focus on ensuring that the regulatory process is as streamlined and minimalistic as possible; that farmers are able to fully take part in all micro-generation schemes and maximise their returns; and that the taxation regime be optimised to incentivise investment and adoption today.”

Ten key recommendations included in the report are outlined below:

1. It should be a target of the government to ensure that that every appropriate farm building has solar panels installed in support of 2030 emission-reduction targets. Further, the Department of Agriculture, Food and the Marine (DAFM) and the Department of the Environment, Climate and Communications (DECC) should be charged with developing a comprehensive strategy to meet this goal.
2. The DAFM and DECC should enter into dialogue with electricity companies and financial institutions with a view to identifying whether a scheme can be devised whereby all upfront costs in relation to the installation of solar PV on farm buildings can be offset and repayable either through low-interest loans or via a tariff on the excess electricity generated and sold to the national grid.
3. The committee recommends that the DAFM establishes and coordinates a cross-departmental one-stop-shop to: inform and encourage farmers about opportunities to adopt solar energy technology at all scales; collate related data; adopt a solar-energy target specific to the agricultural sector; and report to government on the progress of its work.
4. The committee recommends that the Department of Housing, Local Government and Heritage proceeds as a matter of urgency regarding proposals to exempt solar panels on farm buildings from requiring planning permission, with a view to enacting an exemption without delay.
5. It says that the Sustainable Energy Authority of Ireland (SEAI) should establish a dedicated scheme in support of farmers adopting solar technology.
6. The committee expressed concern that a consultation paper in relation to the development of private networks/direct lines, which was due in quarter one of 2022 remains unpublished. The committee recommends this be published as a matter of priority, and that the DECC provides the committee with an indicative timeline of intention to introduce reforms in this area, and provide for direct line connections.
7. The committee recommends that the DAFM and the DECC consider the establishment of a new dedicated scheme to provide for battery or alternative storage measures in the case of solar PV installed on agricultural buildings.
8. It also recommends that the DECC examines the potential of delivering a mechanism whereby farmers are able to store excess electricity generated through the national grid, receiving a comparative amount of energy or credit in return as needed.
9. The committee recommends that the Department of Finance conducts an appraisal as to the performance of the 50 per cent limit on total land area used for the installation of solar panels limit with regard to Capital Acquisitions Tax (CAT relief. And it further recommends that specific consideration is given to the manner in which land area is calculated, and that the existing framework in relation to the Basic Payment Scheme would provide a suitable alternative cognisant of the Department of Finance’s concerns in relation to ensuring that the relief remains available only to active farmers.
10. Supports under the Microgeneration Support Scheme (MSS) are intended to gradually reduce over time from 2024 based on reaching specific deployment milestones, with supports for new installations being phased out from 2028. The committee recommends that the VAT on such products be reviewed in the intervening period.

Additionally, the report recommends that the DAFM ensures that the allocation for solar equipment under Targeted Agriculture Modernisation Scheme (TAMS) in the 2023-2027 CAP period is sufficient to meet the demand of any farmer that wishes to avail of it, and that the government sufficiently resources research regarding on-farm solar. 

‘Too often cast as a villain’

Commenting on the publication of the report, the Irish Solar Energy Association (ISEA) said it contained ‘common-sense proposals that can make it easier for farmers to diversify into renewable energy’. Its CEO, Conall Bolger said: “The farming community is too often cast as a villain in the climate crisis conversation. Solar provides real opportunities for our farmers to play a positive part in Ireland’s climate action, generating new incomes while doing so. This report outlines several ways in which national policy could be changed to make this easier.
“With Ireland now committed to generating significant levels of solar electricity there will be many opportunities for farmers to lease land to solar developers,” Conall explained. “This will provide an additional revenue stream and crucially the land remains suitable for grazing. In total, we estimate solar could utilise approximately 25,000 acres over the next few years. While this is a sizable area it is less than 0.2 per cent of Ireland’s agricultural land, and less than half of the land currently occupied by golf courses.”
The CEO welcomed the committee’s recommendation regarding restrictions created by Capital Acquisitions Tax. “Currently any farming family that leases more than half its land for solar loses the CAT relief that allows for the inheritance of a family farm without significant tax bills. This is too big a risk for many farmers to consider and reduces the availability of land for solar. The Committee has quite rightly recommended a review of this as an unnecessary barrier and we hope this will result in the Department of Finance eliminating this punitive measure without delay.
“Embracing rooftop solar technology on farmhouses and other buildings is another great way for farmers to engage in the clean energy revolution,” he said.
“The proposal to develop a scheme to assist farmers with the upfront costs of investing in solar would be welcome and help more farmers to engage more quickly. Similarly, the concept of targeting rooftop solar panels on every Irish farm building by 2030 is the kind of big thinking that is required to solve our climate crisis.”