Government urged to hasten payments for surplus solar power ahead of feared energy shortages

THE GOVERNMENT HAS been urged to hasten efforts to reimburse people who sell excess renewable energy that they produce ahead of a feared national shortage in the winter.

Under a new scheme, homes, businesses and farms that generate renewable energy, such as through solar panels, will be able to sell back any extra power that they produce to their supplier.

It’s a long-awaited measure that is aimed at bringing Ireland in line with other countries and helping to reward take-up of renewable energy, which in turn reduces the fossil fuel burning that spells chaos for the climate.

However, while the legislation was signed into law in February and came into effect last month, most microgenerators are still waiting for details from their energy supplier on when and how much they will be paid.

Several suppliers told The Journal they plan to issue payments, which will be backdated as far as February, in the coming weeks and months. Climate Minister Eamon Ryan previously stated that eligible microgenerators would start to receive payments from 1 July, depending on their billing cycle. 

Industry experts and Opposition politicians have said that the scheme should have been rolled out quickly and widely, but the Department of the Environment said that suppliers required time to put the scheme in place.

Other snags for prospective sellers include a delay to the final design of the scheme due to recruitment issues and a reduction in the value of solar panel grants, as well as the removal of a battery grant.

The slow progress on solar comes despite fears of energy shortages this winter and a national target to massively increase renewable sources.

“We have an energy crisis and the cost of installing solar PV has escalated as well, but yet the government doesn’t seem to be veering anywhere from where they’re at,” said Pat Smith, chair of the Micro-Renewable Energy Federation.

Speaking to The Journal, Smith said that the “government has to put significant resources into place to try to help people make the adjustment”.

“The talking has to stop and the walking has to start.”

People power

Microgeneration is the practice of producing energy on a small scale. It’s usually taken up as a way of powering a home, business or farm using a renewable source like solar energy.

Under a new programme called the Microgeneration Support Scheme (MSS), microgenerators who produce more energy than they need themselves should be able to sell it back to their electricity suppliers, but most of Ireland’s suppliers are yet to make the necessary arrangements with customers.

In a statement to The Journal, a spokesperson for the Department of the Environment said it is expected that all suppliers will have made a first payment by 31 August at the latest.

“This date recognises that suppliers require time to develop the necessary systems and processes needed to make payments to customers, following the date that export data was first made available to suppliers by ESB Networks,” the spokesperson said.

“The Commission for Regulation of Utilities (CRU) has therefore allowed for one 2-month billing cycle after the date on which export data was made available to suppliers by ESB Networks, which was 1 July 2022.”

Bord Gáis Energy and Energia told The Journal that they plan to implement the scheme this autumn, while Electric Ireland said it expects to contact customers with details later this month.

Panda said it is developing its system to “be capable of remunerating customers” by the end of this month and is in the process of modelling the rate it will pay.

Arden Energy, Pinergy and SSE Airtricity are offering microgenerators a rate of 17.5 cent, 13.5 cent and 14 cent per kilowatt hour (kWh) respectively.

Pinergy said it plans to issue the first set of payments in January 2023 for electricity exported in 2022, while SSE Airtricity said it expects payments to begin later this year.

Other energy suppliers including Community Power, Eco Power, FloGas, PrePayPower and Waterpower were contacted but did not respond.

Alamy Stock Photo Alamy Stock Photo

Speaking to The Journal, Sinn Féin Senator Lynn Boylan said it is “deeply frustrating for people who took the initiative, spent their money and thought that they were contributing to climate action and they’re still waiting to be rewarded for that effort”.

“Even this week, someone showed me a letter they got from their energy supplier saying that they still haven’t set the tariffs for how much they’re going to pay them back,” the senator said.

In a statement this week, Laois-Offaly Independent TD Carol Nolan also described being contacted by people who are ‘increasingly frustrated’ by a lack of timeline from their supplier on when they will receive payment or being passed between different points of contact for documentation. 

She said the minister should “directly intervene” with suppliers and ESB Networks to try to resolve matters quickly, saying it was unfair for people to be “continually kicked from pillar to post”. 

Energy pressure

Renewables are a major part of Ireland’s efforts to shift away from burning fossil fuels, which are a key driver of climate change, and to diversify the country’s energy sources, particularly in the context of Russia’s war on Ukraine and the pressure it has placed on energy prices and security.

Last year, EirGrid warned that Ireland may face electricity shortages over the coming five winters as demand keeps ticking upwards, particularly due to large-energy users like data centres. 

Since then, Russia’s invasion of Ukraine has shocked Europe’s energy market, prompting the EU to ask member states to cut gas use by 15% over the winter. While Ireland will be exempt from that particular step, other concerns remain about energy supply. 

Two emergency gas generators that were expected to open in Ireland before this winter have been pushed back by 15 months, The Journal reported last week, and EirGrid issued two amber alerts this week as the electricity system experienced “tight margins” between supply and demand.

Senator Boylan said that the microgeneration support scheme “absolutely” should have happened sooner in the context of the current pressure on the energy system.

“It seems this is the low-hanging fruit and it’s been painfully slow,” Boylan said.

“I know, maybe from EirGrid’s perspective, it’s only a small amount of electricity in the grand scheme of what they’re facing in terms of demand, but there’s two elements to it.

There’s one, that of course anything can help, but equally, people can feel part of the process and feel like they’re actually doing something worthwhile and contributing.

“That’s a really important part, I think, that’s missing in a lot of climate action at the moment.”

Similarly, CEO of the Irish Solar Energy Association Conall Bolger said that implementing the payment process has “been a little slower than we would have liked”.

“We’ve noted that the CRU has given the industry a bit of a prompt, so I think we’re going to see more of those tariffs coming through now in the near future, which is great,” he said.

“Every kilowatt hour that somebody makes in their home is one that doesn’t have to be made somewhere else. Scaling it up is definitely important,” Bolger said.

“It would have been great to have done this earlier. Similarly, for renewables more widely – utility-scale solar and on the wind side as well – there’s a lot of projects that have been waiting a long time to get onto the network.

The security supply issue was in the post for years. We knew it was coming.

“Every solar farm you put on, every customer that puts panels on their roof, they’re helping make that problem a bit smaller.”

Renewables

A recent MaREI study commissioned by the ISEA found that one million homes in Ireland would be suitable for installing six solar panels, which would produce enough energy total to equate to 21% of the power system’s current size.

The government is trying to increase the proportion of electricity that comes from renewable sources such as wind and solar to up to 80% by 2030.

Under the Climate Action Plan 2021, a final High-Level Design for the Microgeneration Support Scheme was due to be published in the first three months of the year.

However, the scheme design was delayed in the first quarter, delayed again in the second, and is still yet to be published.

The Department of the Environment has been working with the Commission for Regulation of Utilities (CRU) to finalise the final scheme design (FSD) document.

“Whilst the CRU has provided substantial input to date, they have significant resource gaps and are currently recruiting to staff up this area,” an update report outlined.

In a statement to The Journal, the CRU said that it has started recruitment for 73 new posts, planning to increase its staff by 60% to 195. Currently, applications received for manager and graduate roles are being assessed and analyst roles are due to be advertised in September.

“These posts will enable the CRU to take on significant new functions and accelerate existing programmes of work to deliver on Ireland’s policy goals and the transition of Ireland to a net-zero carbon economy,” the CRU said. 

Work on solar panels on the roof of an office building in Killarney, Co Kerry Alamy Stock Photo Alamy Stock Photo

Despite its absence to date, some of the scheme’s measures are already in place, including solar panel grants through the Sustainable Energy Authority of Ireland (SEAI).

In 2022 and 2023, the maximum grant available for solar panels is €2,400, a decrease compared to a previous value of €3,000.

“In the context of an energy crisis, they should not have a regressive policy on grants for solar PV,” Pat Smith of the MREF said.

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“We should have a progressive policy of encouraging as many people as possible to put solar PV on the roofs as quickly as possible, both to reduce the business or the homeowner’s energy costs but also to generate renewable energy.”

Additionally, a grant for batteries that allow surplus energy to be stored and used later is no longer available, which Smith described as a “massive mistake”.

“If you can encourage people to store surplus energy that’s generated during the day with battery storage to run their homes in the evening, it makes sense,” he said.

Senator Boylan also raised concerns about the solar grant, saying it is not sufficient for people who are unable to afford the upfront costs of installing the panels.

“We have to be really careful that any climate measures we’re taking are not wealth transfers and leaving a whole cohort of people behind,” she said.

Conall Bolger of the ISEA also said that the upfront costs of installing solar panels pose a challenge. As it stands, people living in energy poverty face a “lot of their income going out the door on energy payments”.

“Something we think for people in energy poverty that makes sense would be looking at some sort of model that’s 100% grant funded. Ultimately, a lot of other fixes like the PSO levy or credits or VAT reductions are very short term, whereas the panels are something that can help people long-term free up money to be used for other things.”

Agriculture

While the residential sector is a key focus, another area of society will also be looking to see if it can make solar work: agriculture.

Farmers, who must collectively reduce their emissions by 25% by 2030, have been advised to consider adopting solar power to decarbonise their energy consumption.

In a slightly different system to homeowners, microgenerators like farms and businesses will be paid for surplus energy sold back to the grid through a Clean Export Premium (CEP) feed-in tariff.

In 2022, that tariff is set at 13.5 cent per kilowatt hour and will be fixed for 15 years.

Pat Smith said the government must set a tariff “that reflects the cost of installing solar PV and that ensures that the feed-in tariff can give a market return”.

“It should be fixed at a minimum of 17 and a half cent initially and it should be linked to the Consumer Price Index over the next 15 years,” Smith said.

“To ask somebody to sign up to a contract at 13.5 cent for 15 years, when the market price today for renewable energy is between 15 and 20 cent per kilowatt hour, it seems a bit senseless and out of touch with their stated ambition of encouraging people to adopt renewables.”

Between grants and reimbursements, farmers interested in solar will have been crunching the figures to work out whether it makes financial sense, according to Paul O’Brien of the Irish Famers’ Association.

O’Brien, Chair of the IFA’s Environment Committee, said that Ireland has been “very slow” to adapt to developments in solar power.

“This has to really start taking off massively,” O’Brien said.

“That’s not only from the farming perspective, that’s from everybody’s perspective, because there’s going to be considerable amounts of people looking at their energy bills over the last couple of months and saying to themselves, okay, if we can apply for grants or we can get panels in, then at that stage, we want to be able to export surplus.”

O’Brien encouraged farmers to consider taking up solar but added that the government “has to allow this process to work”.

“It’s the government who will be the drivers of this,” he said.

He said solar power represents a significant opportunity for the government to drive renewable energy in agriculture as well as other sectors such as transport.

However: “We are late to the game, we should have been starting this in maybe 2016 or 2017. We were slow.”

It’s up to the government now to come very, very clearly and give us the plan of how we can adapt and how we can sell our surplus electricity back to the grid.

“That will encourage adaptation, that will encourage measures down at farms. Farmers are massively into that sort of thing. They will really grasp this,” he said.

“I think this is going to really take off massively. But it can only take off massively if it’s backed.”