Profiting From Solar

As well as harnessing energy from the sun for their own domestic energy needs, households with solar panels can generate a small income by selling any surplus energy produced back into the grid. A long-anticipated measure aimed at bringing Ireland in line with other countries and promoting renewable energy has now been introduced by the Government. It permits homeowners to sell excess energy from solar panels or other means back to the grid.

Under the programme known as the Microgeneration Support Scheme (MSS), micro-generators who produce more energy than they require can now opt to sell it back to their electricity suppliers. Microgeneration is the practice of producing energy on a small scale and is generally utilised as a way of powering a home, business or farm from renewable resources such as solar or wind energy.

The MSS scheme is also open to microgeneration from other technologies such as micro-wind, micro-hydro and micro- renewable combined heat and power (CHP), although solar is the most common by some distance. Legislation enabling the scheme was signed into law in Ireland in February 2022 before coming into effect in July. Under the scheme, customers simply require a grid connection and a smart meter, then the volume of power exported to the grid can be quantified and earn a fee.

In most cases, the Clean Export Guarantee tariff is paid as a discount from electricity bills for power used when solar is not available or is insufficient to meet the home’s needs. According to ESB Networks, over 21,000 customers are now availing of the tariff, but with improved solar panel grants now available through the SEAI, it is anticipating a significant increase in the number of households joining the scheme.

Solar panels can be installed separately from other retrofit measures and participants are not required to demonstrate an improved BER rating to participate in the scheme. Homeowners with solar panels interested in the scheme, but who have yet to sign up for the tariff or those fitting panels for the first time need to fill out an NC6 microgeneration notification form which enables checks to be carried out to ensure their installation is eligible for the payment.

The majority of the 21,000 microgenerators are residential customers who were already supplying the surplus from their rooftop panels for free because there was no system to calculate the surplus energy provided and the attendant fee. The new system is essentially designed to reward householders for contributing to the nation’s electricity production.

Solar power generation operates on a ‘use it or lose it’ basis and must be used when it is generated or stored in batteries for later use. However, the cost of battery storage units has proved prohibitive for many households and not all homeowners with solar PV panels are opting to sign up for the scheme. Some prefer, for example, to remain with their NightSaver meter and benefit from the low kWh night rates, which operate from 11pm to 8am/9am. In this instance, there is no obligation to install a smart meter.

Some householders will also have a diverter installed to direct some excess energy to generate hot water. In light of soaring energy costs, retaining as much energy in the house as possible may be preferable. Obviously, the more power deployed in the house, the less energy there is to sell back to the grid.

With interest in solar technology growing rapidly and many new homes being built with solar panels already fitted, the Government has indicated that the current level of grant supports and payments will likely be phased out in the coming years. It has already eliminated the €600 grant for battery storage before the introduction of the MSS – a decision which was criticised as a regressive step by many commentators who argue that solar microgeneration is relatively low maintenance and also one that can be implemented rapidly in contrast to schemes such as offshore wind.

Individual electricity suppliers decide the amount paid and some are more generous than others, with figures so far varying from 13.5 cent per kWh to up to 20 cent. There are a number of factors that determine what a micro-generator might be able to sell back to the grid: namely the size of the house, the number and size of solar panels on the property, and the amount of energy they are capable of producing and using. Five hundred excess units at a rate of 13.5 cent, for example, could be worth €67.50, while 1,000 excess units at a rate of 20 cent could amount to €200. An even larger system, capable of exporting 1,500 excess units at rate of 20 cent, would be worth €300.

Pinergy was one of the first to declare its offering at 13.5 cent per kilowatt hour (kWh) while Electric Ireland offers a rate of 21 cent per kWh and estimates that payments will range between €50-€300 per year, depending on the size and type of the microgeneration system. A typical installation of ten panels should yield around €150 per annum.

Payments, or bill credits, are backdated to February when the scheme was formally announced and the first €200 is tax free, although anything above that figure is liable for income tax. While the potential earnings from the scheme are relatively modest, it should be remembered that the home has already made giant strides towards becoming energy self-sufficient, and the MSS earnings will contribute towards the rest of the property’s energy costs. In addition to the financial benefits, it will also significantly contribute towards meeting the country’s renewable energy and carbon reduction targets.

Meanwhile, a separate scheme has also been launched for customers with more extensive solar facilities. The Clean Export Premium is geared towards industry, large farms, schools, community buildings and institutions and will pay a lower rate per kWh, but it will be fixed for fifteen years.

EirGrid, which manages the national electricity grid, is preparing to handle around six hundred megawatts of micro-generated solar power by 2030, enough to fully power a quarter of a million homes.