Cheaper energy bills on way across Meath as VAT scrapped on solar panels

The average Meath household could achieve freedom from costly electricity bills a year earlier than expected after the VAT on sustainable solar PV panels was scrapped this week (May1).

Savvy homeowners will now recoup the estimated cost of a 12-panel Solar PV (photovoltaic) system in a little over five years, thanks to a combination of the rate cut and electricity prices which have doubled in the last year.

Solar PV technology allows householders to generate their own clean energy, saving up to 70% on the cost of an annual electricity bill when combined with battery storage, and to sell excess power back to the grid.

While Finance Minister Michael McGrath has admitted he has no way of making companies pass on the benefits of the VAT removal from solar panels to customers, a solar PV expert has predicted that the industry will immediately cut its prices.

“The consumer is definitely going to benefit from the full effects of the VAT reduction,” said Adrian Casey, co-founder of one of Ireland’s largest solar PV companies Swyft Energy.

“Ireland is a competitive market, with 241 registered installers in the country. If companies do not immediately reduce their prices, they will be out of step with the market and will lose business as a result.

“Our domestic electricity rate has doubled in the past year from 0.26c/kWh to 0.49c/kWh – the highest average price in Europe – meaning average household bills have soared from €1,196 to €2,254 based on 4,600 kWh consumption annually.

“The removal of 13.5% VAT has meant that both panel-only and battery systems will have paid for themselves in a little over five years, 12 months earlier than with the full VAT charge.

“Householders will consume 70% of their solar production on average and sell 30% back to the grid, earning a feed-in tariff, for the remainder of the 30-year plus lifespan of the system.”

The VAT cut applies to solar panels and associated equipment such as controllers, combiner boxes and, notably, batteries which can add substantial cost to solar installations.

Solar PV is currently the most attractive option for many households who want to make a conscious contribution to a green future.

“The Irish solar PV market will follow a similar growth trajectory to Germany where 9% of electricity needs are supplied through solar,” said Mr Casey.

“Ireland is comparable with Germany – which is one of the largest solar-powered nations in the world – in terms of sunlight hours and PV production.

“Even in so-called low-light conditions, on cloudy or rainy days, or at dusk, quality solar PV systems keep producing output.

“The key to capitalising on this energy when it is needed lies in the use of a battery, which captures the excess electricity generated by PV panels to power your home in the evenings.

“At Swyft Energy we integrate our solar PV systems with a smart programmable battery which can charge at night from the national grid, using cheaper night rate electricity.

“A solar PV system can also increase Building Energy Rating (BER) and, as a result, improve the list price of a property.”