Louth firms to see solar energy payback ‘two years ahead of schedule’

Louth businesses switching to solar power can expect their new energy system to pay for itself in three years – two years ahead of government predictions, one of Ireland’s leading solar PV firms has said.

Funding packages of between €2,700 and €162,600 have been introduced to encourage more businesses to install a solar photovoltaics (PV) panel system, which generates electricity when exposed to light.

According to the Department of Environment, Climate and Communications, the grants, operated by the Sustainable Energy Authority of Ireland, will “subsidize 20-30% of the investment cost, reducing payback to as little as five years”.

But Adrian Casey, the co-founder of Swyft Energy, one of Ireland’s leading solar PV firms, said some businesses could see payback in three years.

He said a medium-sized business consuming 42,000 units per year at a rate of 36 cent per kilowatt/hour (kWh) could reduce their energy bills by up to €8,000 per year by installing a 30 kilowatt (kWp) system. Prices for a 30kWp system, he said, start from €32,000.

But amendments to the grants unveiled by Environment Minister Eamon Ryan on July 4, reduced the cost of installing of such a system to €23,400 — meaning firms paying the 36c rate could expect payback in three years, Mr Casey said.

“On average, small-to-medium sized businesses are installing 30kWp Solar PV systems, equivalent to 64 panels, covering 128 square metres,” Mr Casey explained.

“This type of system generates roughly 26,000 units of electricity per year, and – depending on the business’s electricity consumption pattern – 70 to 80% of this power would be used on site, with the excess electricity sold back to the grid.”

Larger premises – such as warehouses consuming 200,000 units per year at a 23 cent electricity rate – could generate around 135,000 units with a 150kWp, 320-panel system, he added.

“This type of system costs €145,000 and would reduce annual energy bills by around €25,000,” Mr Casey said.

Previously, businesses of this size could expect payback in six years. “With the new announcement, a 150kWp system will receive a grant of €32,600, reducing the cost to €112,400 and the payback to four-and-a-half years,” Mr Casey said.

Firms which decide to install a new solar PV system can also benefit from the Accelerated Capital Allowances (ACA) scheme, whereby the cost of the system can be offset against profits to reduce companies’ tax bills.

“Solar PV is one of the only purchases that a company can claim 100% of the ACA in the year of purchase,” Mr Casey said.

Switching to solar power also helps businesses improve their carbon footprint and environmental, social, and governance (ESG) profiles, he added.

“A 30kWp system will reduce CO2 output by roughly 10 tonnes per year or 300 tonnes over the 30+ year lifespan of the system,” Mr Casey said. That is equivalent to planting 2,800 trees.

How do commercial solar panels differ from domestic panels?

Solar panels for businesses average 1.9m by 1.2m and are larger than panels installed on the roofs of domestic premises, which normally measure 1.7m by 1.1m.

The larger panel means the wattage per panel is also typically bigger, usually 470-500W versus 400-430W for a domestic install.

The number of panels used by a small-to-medium (SME) sized business can range between 30 and 140 panels, compared to an average of 12 used by family dwellings.

What are the benefits of switching to solar?

The main benefit is a significant reduction in energy bills. Overheads can be reduced further by selling power back to the national grid.

Other benefits include a reduction in a firm’s carbon footprint, and an improvement in its environmental, social, and governance (ESG) score.

A typical, medium-sized business in Ireland will see an annual CO2 reduction of 9.9 tonnes, with small businesses reducing emissions by 5.8 tonnes.

A business that actively cuts its carbon footprint while improving its ESG score demonstrates to its customers, employees, and future employees, that it cares about the environment.

Solar panels also increase energy independence, and boost the value of commercial property.

How much do commercial solar panels cost?

The cost of a commercial solar panel system for a small to medium-sized business can vary between €20,000 and €80,000.

Costs will depend on business needs and available roof space. The amount of energy required and the power of the panels are also significant factors.

The average medium-sized business in the Ireland uses around 25,000 to 50,000 kilowatt hours (kWh) of electricity each year; it’s 15,000 to 25,000 kWh for small businesses.

A business should expect to pay between 20 and 45 cents per kilowatt hour for its electricity.

Grants available and payback period

Funding packages of between €2,700 and €162,600 have been introduced by to encourage more businesses to install a solar PV system.

Grants from Sustainable Energy Authority of Ireland will support 20-30% of the investment cost, meaning some businesses could see payback in as little as three years.

Firms which decide to install a new solar PV system can also benefit from the Accelerated Capital Allowances (ACA) scheme, where the cost of the system can be offset against profits to reduce the company tax bill.

Breakdown of SEAI grants

Solar PV SystemsGrant Value
Up to 6kWpUp to €2,400
€/kWp installed between 7kWp-20kWp€300 per kWp
€/kWp installed between 21kWp-200kWp€200 per kWp
€/kWp installed between 201kWp-1000kWp€150 per kWp

Solar Planning Exemptions

Planning permission for solar PV and planning is no longer required for rooftop systems – unless the install is located in a Solar Safeguarding Zone (SSZ). SSZs are areas located near airports, helipads and aerodromees. If your property is within a SSZ and the install is greater than 300sqm (roughly 140 panels), you will need planning permission. A Glint and Glare report will be required as part of your planning application. A full list of SSZs can be found on www.myplan.ie.

ESB

ESB need to be notified of your solar PV install for safety purposes, and to allow you to export to the grid if applicable. Your solar installer will complete this application for you. There is an application fee required. ESB will then decide on the level of solar PV export allowed for your property.

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