BUDGET 2024 - What's in it for Solar?

Any way you slice it, a €14 billion pie is almost certain to contain something for everyone. The government’s massive 2024 Budget (including €6.4 billion in spending) was no exception. The Irish solar industry sector’s leading voice, the Irish Solar Energy Association (ISEA) described Budget 2024 as containing “welcome measures” – and there were important changes to key supports for those looking to get solar panels in Ireland.

The government and some commentators characterised the creation of a €14 billion nature and climate change investment fund “to lock in money for the inevitable challenges ahead”, as among the first of its kind in the world and “the single most important element in Budget 2024”.

ISEA president Conall Bolger was less impressed. He criticized Budget 2024 as emblematic of what he described as the Government’s “lack of urgency” in addressing climate change.

“The commitment to invest in climate change through a creation of the new €14bn Infrastructure, Climate and Nature Fund?is to be welcomed,” Bolger said. “But the crisis we face is now, not in seven years’ time, and there is a lack of clarity on how these investments will address today’s challenges.”

Bolger was severely critical of the failure to remove tax barriers that prevent farmers from leasing land for solar panel developments. “Central to Ireland’s decarbonisation plan is the government’s own stated ambition to develop 8GW of solar energy by 2030. This will require approximately 25,000 acres of solar panel farms within this decade and making this a reality will require the cooperation of farmers across the country.” Bolger said. “We had expected the government to remove this arbitrary rule that punishes farmers who engage in renewables and is significantly reducing the availability of land for solar.”

There are, nevertheless, significant bits of good news for solar in Budget 2024.

In his department’s budget message, Environment Minister Eamon Ryan touted what he described as “record funding” for retrofitting and solar panels. In real terms, this means a €24 million increase in funding (to €380 million) to the Sustainable Energy Authority of Ireland (SEAI) for grants for residential and community energy upgrades. The solar PV grant , for example, enables homeowners, businesses and community groups to avail of generous grants (up to €2,100 for homeowners) for installation of solar panels.

The increase, Ryan said, “means that more funding than ever will be available to make homes warmer, healthier, more comfortable and less expensive to heat.”

Even with the generous SEAI grants in place, installing solar panels has seemed expensive and out-of-reach for some – often those who most need the savings solar makes possible . Recognizing this, according to Minster for Public Expenditure Paschal Donohue, the government has instituted a new low-interest loan scheme that will work alongside the SEAI grants “to allow everyone the opportunity to benefit from energy savings.” That’s a change with the kind of real world, right now, impacts the ISEA has called for.

Budget 2024 also contains several other measures welcomed by environmentalists and those in the renewable energy sector.

Since 2022, under the Clean Export Guarantee programme, homeowners and businesses generating electricity with solar panels have been able to sell any excess they generate back to the National Grid through their energy supplier. Any income they earn, however, is subject to tax.

In a welcome move , Budget 2024 doubles – from €200 to €400 – the exemption from income tax, USC and PRSI on those profits.

“This government has done a lot to support homes to invest in rooftop solar panels.” said ISEA chief Bolger, “Doubling the tax disregard when a household sells excess solar electricity back into the grid will increase the tangible benefits of homes investing in solar.”

The move was similarly applauded by Pat Smith, chair of the Micro Renewable Energy Association, as “a hugely positive measure.”

Budget 2024 also includes a change to VAT. Earlier in 2023, the government had passed a 0% VAT rate for the supply and installation of solar panels to private homes, a move that boosted installation figures across the country. Budget 2024 extends the 0% VAT rate to the installation of solar panels in schools.

The extension, ISEA’s Bolger said, is a sensible measure that would assist schools in communities across the country to make the cost-saving, climate-friendly switch to solar.