As Ireland continues its journey towards a cleaner, more sustainable energy future, Budget 2025 offers a critical opportunity to advance the nation's solar ambitions. The Irish Solar Energy Association (ISEA) recently presented its key recommendations for Budget 2025 to the government, emphasising the urgent need to reverse recent cuts to solar grants, review mixed signals in environmental taxation, and provide additional resources to key agencies and stakeholders driving the energy transition.
Solar's Role in Achieving Ireland’s Climate Goals
Solar energy is an essential piece of the puzzle if Ireland is to meet its 2030 climate goals, particularly the target of achieving 80% renewable electricity generation. Solar power can make a substantial contribution to this objective, with an estimated 8,000 MW of solar required by 2030. Of this, 2,500 MW needs to come from domestic and commercial rooftop installations. Yet, despite the critical need for solar deployment, government policies are currently undermining progress.
First Request: Reversing Cuts to Solar Grants
One of ISEA’s most pressing concerns is the government's decision to gradually reduce grant supports for rooftop solar installations under the Microgeneration Support Scheme. These cuts are set to decrease the maximum available grant by €300 each year from 2023 through 2028, reducing support from €2,400 to just €900 over that period.
This reduction could significantly hinder Ireland’s ability to achieve its solar targets. In 2023, just 316 MW of micro-generated solar was connected to the grid; we need at least another 2,000 MW of onsite solar to meet 2030 targets. The number of grant applications saw a sharp decline from December 2023 to January 2024, a clear indication that these cuts are already discouraging households from installing solar panels.
At a time when every kilowatt of clean energy matters, ISEA is calling for the immediate reversal of these grant reductions. By restoring full grant support, the government can encourage widespread solar adoption, helping to meet Ireland’s solar and climate goals while avoiding costly compliance penalties for failing to reach renewable energy targets.
Second Request: Addressing Mixed Messages in Environmental Taxation
ISEA’s second request focuses on addressing the inconsistencies in Ireland's environmental tax policy, which currently sends mixed signals to the solar sector. For example, the conditions attached to Capital Acquisitions Tax (CAT) Agricultural Relief and Capital Gains Tax (CGT) Retirement Relief create disincentives for farmers to release land for solar development, a critical need if Ireland is to reach its utility-scale solar targets of 5,500 MW by 2030.
ISEA is urging the government to prioritise a review of these tax measures as part of Climate Action Plan Action CP/24/1. This review should include an assessment of how restrictive conditions under CAT and CGT reliefs are negatively impacting the solar sector, and propose solutions that make solar deployment more attractive to landowners.
Additionally, ISEA is advocating for reforms to the Valuation Act 2001, which currently does not provide a clear exemption for solar installations on commercial rooftops. Extending tax relief to such properties, as seen in the UK, would provide a much-needed boost to the commercial solar sector, further contributing to Ireland’s renewable energy goals.
Third Request: Allocating Resources to Support Energy Transition Leaders
The energy transition will require concerted efforts from government departments, regulatory bodies, and industry stakeholders alike. To facilitate this, ISEA’s third request is for further budgetary resources to be allocated to key institutions such as ESB Networks, EirGrid, the Sustainable Energy Authority of Ireland (SEAI), and An Bord Pleanála. These entities are on the front lines of the energy transition and must be adequately funded to overcome the regulatory, planning, and grid challenges that are currently slowing solar deployment.
A Path Forward for Solar in Ireland
The recommendations put forward by ISEA for Budget 2025 are designed to remove the barriers currently hindering the growth of solar energy in Ireland. By reversing cuts to solar grants, addressing tax policies that disincentivize solar projects, and ensuring adequate funding for key agencies, the government can empower Ireland to meet its ambitious renewable energy goals.
With a potential far greater than the Government target of 8,000 MW of solar capacity by 2030, Ireland stands at the cusp of a solar revolution. But success is not guaranteed. ISEA calls on the government to seize the opportunity presented by Budget 2025 to accelerate solar deployment and ensure that Ireland remains on track to achieve its climate targets. The road to 2030 is challenging, but with the right policies in place, a cleaner, brighter future powered by solar energy is within reach.
We look forward to discussing these proposals further at the Solar Ireland 2024: Road to 2030 on October 1st. Together, we can make Ireland a global leader in solar energy and a beacon of sustainability for future generations.
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