Most of us have been watching our gas and electric bills through our fingers for the past few months.
And the fear that accompanies the arrival of what increasingly looks like a mortgage amortization is about to intensify further.
Some have already reported receiving utility bills that are two to three times what they paid last year.
But the very structure that costs us that money — our homes — could be the key to reducing our bills and even making a little money in the process.
The government has in recent months introduced a scheme to allow homeowners to sell excess energy generated from solar panels or other means back to the grid.
What is involved?
The government’s climate action plan sets a target of 2.5 GW (Gigawatts) of energy coming from solar energy by 2030.
It is hoped that the Microgeneration Support Scheme (MSS) could contribute around 380 MW (Megawatts) to this, which would roughly equate to over 1 million solar panels on around 70,000 buildings.
Legislation enabling the system was signed into law in February before taking effect in July.
According to MSS, homeowners can receive a payment per kilowatt-hour of the extra energy they generate and sell back to the grid.
And the payments could be updated to mid-February, or when the microgenerator became eligible for the scheme if after that.
Many suppliers have not yet started payments, despite promising to start in August, but it is expected that the payment process will start soon.
So, how many households produce their own energy?
According to a study by the MaREI Center at UCC, about 24,000 homes have already started to go solar.
The study concluded that up to 1 million households in Ireland could realistically go solar by 2030, which is significantly higher than the government’s own target of having 250,000 new rooftop solar systems installed by that date.
They made the calculation using the total number of houses with enough roof space for ten solar panels and with suitable orientation while excluding vacant properties and apartments other than those on the top floors of complexes.
That’s the equivalent of enough energy to power one in four of all Irish homes, it notes, achieving around 8% of our renewable energy targets while eliminating an estimated 135,000 tonnes of greenhouse gas emissions.
How much does it cost to install solar panels?
There are many variables including the size of the house, the number of panels that can be accommodated and how much energy you want to generate with your solar panels, but the standard installation of around 6 panels is estimated to cost around €5,000.
A grant of up to a maximum of €2,400 (depending on the size of the system and the amount of power it generates) is available from the Sustainable Energy Authority of Ireland which brings the expenditure down to around €3,000 for the standard project.
The benefit for the typical family would be that it would produce up to 40% of the household’s annual electricity needs, which would offset between €400 and €450 per year – and even more at current prices.
“If you offset around €400 on your electricity, the payback is somewhere between 7 and 10 years,” estimates Paul Deane, senior researcher in clean energy semesters at the MaREI Center in UCC.
“It’s a relatively decent payback because after the system pays for itself, you’re producing free or low-cost energy for the next 20 years or so,” he added.
That return could potentially accelerate significantly if energy costs stay at current levels.
If I do not cover the entire property’s energy use, how would I be able to generate excess energy for the grid?
Energy production from solar energy works on a “use it or lose it” basis.
So much of it already ends up going back online, basically for free.
This new system will essentially reward the home owner for this contribution to the nation’s electricity production.
Some homeowners will have a diverter installed that directs some of the excess energy to generate, for example, hot water.
It can also be sent to battery storage which will store some energy as a surplus.
But the more energy that remains in the house, the less is returned to the grid for which the homeowner can be rewarded.
Again, in light of current energy costs, keeping as much energy in the house as possible is probably preferable.
The government recently removed the €600 grant for battery storage pending the introduction of the MSS which will reward householders for their energy allowance.
How much can I get for generating electricity for the grid?
Participating energy providers plan to pay different amounts, but some are more generous than others, ranging so far from 13.5 cents per kilowatt-hour to up to 20 cents.
There are many variables that govern what a microgenerator could sell back to the grid, including the size of the house, the number and size of solar panels on the property, and the amount of energy they can produce and use.
500 excess units at a rate of 13.5 cents, for example, could be worth €67.50 while 1,000 excess units at a rate of 20 cents could amount to €200. An even larger system, capable of exporting 1,500 surplus units at a rate of 20 cents, would be worth €300.
The first €200 is tax free but anything over that will be taxed as income.
It is by no means a king’s ransom, but when the home is already well on its way to becoming largely energy self-sufficient, it will make a nice contribution to the property’s other energy costs.
And in addition to the cost benefits, together it will make a significant contribution to meeting the country’s renewable energy and carbon reduction targets.
Will the grants be around long term or should I do this as soon as I can?
In light of the rate at which energy costs are increasing, it may be a smart home investment right now, especially if there is spare cash.
“Every kilowatt hour you don’t have to buy in is a savings,” noted Pat Smith, president of the Micro-Renewable Energy Federation.
“If you put in solar panels, it will be the only investment in your home that will give you an annual payment for any excess payment to the grid, which will reduce an energy bill that rises and it will improve the value of your home in relation to its resale value,” he added.
He said he believed the removal of the battery allowance was a regressive step that could signal further reductions in subsidies in the coming years as more and more people want the technology installed.
He argued that the grants should increase in value because the cost of installing solar technology is steadily rising worldwide.
He was also critical of the decision to end support for solar panel installations by businesses, a move which, he said, “didn’t make sense”.
“They will benefit from the feed-in tariff, but they are denied grants and support to introduce microgeneration going forward,” he explained.
“We have hundreds of businesses that are under huge pressure. The government should be giving readily available grants to all businesses to try and get them to generate renewable energy,” argued Pat Smith.
He added that micro-solar generation was a “quick fix” and one that could be implemented very quickly.
“Offshore wind could be 5 or 6 years down the road,” he pointed out.
Solar is also relatively low maintenance compared to wind because there are no moving parts and the output is considered predictable.
Although we don’t live in the warmest or sunniest of climates, despite belief to the contrary, we do get quite a lot of natural light in this country.
In addition to utilizing it for our own household energy needs, we will soon be able to generate a small income from it.
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