Solar PV continues to grow in interest among the agricultural sector. This reliable, non- intrusive technology can provide real opportunities to reduce your farm’s electricity bill while helping to decarbonise the sector.
There are currently a number of grants and schemes in place to incentivise the uptake of solar PV systems.
It is important to match the size of the solar system with your farm’s energy usage, as you currently are not paid for excess electricity produced.
VAT (flat rate farmers)
Since January 1, 2012 a flat rate farmer can claim back the VAT incurred on the purchase of a solar PV system, which is designed to be used mainly or solely in his or her farming business. The PV system must be named on Triple E Product Register. This Register is the public database maintained by the Sustainable Energy Authority of Ireland (SEAI) containing a list of products which comply with the energy efficiency criteria of that Authority. It can be accessed at the SEAI website: www.seai.ie. The claim is made through the Revenue Commissioners VAT 58 form
If eligible, the Targeted Agricultural Modernisation Scheme (TAMS) provides a 40% grant on a solar PV investment, while young qualified farmers can get up to 60% in grant aid. PV installers need to be on the SEAI register of installers or the Department of Agriculture, Food and the Marine (DAFM) approved list.
TAMS support is now available to support up to 11kW solar PV on dairy, beef, tillage and sheep farms. This complements the 40% support already available to the pig and poultry sector through the Pig and Poultry Investment Scheme 40%, which is not limited to 11kW.
Farmers should check their insurances to ensure that they have cover for such work. They should insist on seeing datasheets of the technology being installed, and get written confirmation of place of manufacture and warranties with exclusions.
Another key issue is business reputation and robustness, as some installer companies sail close to the edge financially. Farmers need to pay deposits to companies which are solid and going to be around for the long term. Farmers need assurances that purchased panels are warranted against ammonia erosion, especially on pig and poultry units. See the TAMS section of the DAFM website for full terms and conditions.
Once you have bought your solar PV panels, the maintenance and operating costs are small. The panels and inverters will require cleaning approximately every 10 years. Panel output should be expected to fall at a rate of 1% per year. The financial return is mainly tied up with the value and amount of energy generated.
The main part of this is derived from the Renewable Energy Feed-in Tariff, which would pay a set amount of money per kWh of electrical energy generated. The Republic of Ireland does not have any feed-in tariff for solar PV at present. A feed-in tariff would normally be paid by a registered electricity company of your choice and would be determined at the time of application, according to the technology and the size of installation you have. In some countries you can receive a feed-in tariff regardless of whether you export or use the electricity yourself. These tariffs are generally linked to inflation for periods of 15-20 years.
If, as in most cases, your solar PV panels operate in parallel with your mains supply, they help to displace the energy you would normally have bought from the grid. For example, if your electricity need at a particular time is 20kW and your PV system was producing 5kW, your net import from the grid would be 15kW. Each unit of electricity you displace from your imported requirement effectively saves you on the imported price of that unit. If you buy your energy at 18 cents (c) per kWh and you displace 10,000kWh you save €1,800.
If you are generating more energy than you are using and your PV system is connected to the grid, the balance will be exported but you will not receive payment at present, although this is expected to change. For larger systems where you want to be paid for exporting electricity then metering will be required. Together with an export meter you will require a Power Purchase Agreement (PPA). PPAs are set by contract between you the generator and an electrical supply company.
It is worth noting that displacing your own energy use is worth more to you than exporting. Therefore, solar energy systems work best if you have a daily energy use to balance your generation so that you can consume the energy you generate. Feed-in tariffs will be needed to give adequate paybacks. There are some tax advantages with accelerated capital allowance