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Dáil

Saincheisteanna Tráthúla - Topical Issue Debate ›

Renewable Energy Generation

Summary

Deputy Dolan called for safeguards or a minimum payment to protect households and farmers investing in solar panels from falling clean export guarantee tariffs. The Minister of State said suppliers set tariffs competitively under CRU oversight, with no evidence of significant reductions, while highlighting new battery grants and agreeing to refer the concerns to the Minister.

Across east Galway and, indeed, the country, families and farmers are putting their own money into solar panels. They are looking at the electricity bill, they are looking at the roof on the house and the farm shed, and they are making a decision to invest. That investment is something that should help them for years to come. Even with grant support, that is still a substantial commitment. People use savings and some borrow. They work out what they have to and make sure that the payback period makes sense and that they will get their money back. Part of that calculation is what they will receive for the electricity they supply to the grid. My concern is that, over time, suppliers could chip away at those payments, leaving people with a very different return from the one they expected when they installed their panels. I recognise that the clean export guarantee provides for payment, but families need some certainty about what that payment will be worth. If a household is expected to pay a high price for electricity coming into the home, it is reasonable to expect a respectable price for the electricity going out. I accept that there are different costs involved, but the small producer still deserves a fair deal. Will the Government examine a minimum export payment or another enforceable safeguard to protect households and small farmers against the erosion of their payments? Will the Minister of State ask the regulator to examine whether the current arrangements give people enough certainty to invest?

To elaborate on it a bit further, I have a fear that, down the line, the electricity suppliers could cut the payments that people based their original decisions on. There are many people out there right now who are struggling to meet the high costs of energy and just keeping their lives going. Whether it is the electricity coming into the house or trying to operate a small business or farm, everyone can benefit from being energy independent in their own right. That is what solar panels give people. I understand about if the grid does not have the capacity, whether it is by virtue of not having enough battery storage yet or whatever the case may be, but we cannot allow the energy companies to disregard the initial investment that was made by these people and the deal that they signed up to. For example, if they are getting 19 cent per unit that they export, they should continue to get that because that was the deal that they signed up to when they bought the panels. I understand that things can change, but the Government needs to give people certainty over the amount they are going to be paid for the electricity when they export it because these calculations are done based on the payback period. They buy the panels and put them up and the payback period says, that within four to six years, they will have made their money back. From then on, they will be in a great position because they will have lower energy bills. In the summer, they will go into a credit. In the winter, they will eat into that credit. For families that have done this that I have spoken to across east Galway, they have told me the benefits they have got from solar panels.

I welcome the Minister's announcements today to fund batteries to the tune of €600. That is a fantastic idea because that will give people even more energy independence. I also welcome that the grants are now being extended to homes that were built between 2022 and 2025, which means that those people can access the benefit of panels as well.

I hope I have made my point clear and I look forward to the Minister of State's response.

Comment on this

I am grateful to the Deputy for raising this pertinent and timely issue. For the benefit of the House, if the Deputy does not mind, I might give a bit of context as requested by the Minister, Deputy O'Brien. The microgeneration support scheme, MSS, provides supports to domestic and non-domestic applicants, in the form of grants for solar PV installations, up to a maximum of €1,800 in 2026 for household installations. As announced this morning, the scheme will also provide as of next week a new €9,000 grant for homeowners in receipt of certain Department of Social Protection payments.

The domestic MSS forms part of a wider residential retrofit programme that, in line with eligibility criteria, supports energy efficiency upgrades and the installation of renewable energy technologies in existing housing stock. Since its pilot launch in 2018, the domestic solar PV scheme has gone from strength to strength, with over 123,000 homes being supported. Budget 2026 allocated over €67 million to this year’s scheme and so far this year, over 21,000 homes have been supported. Renewable electricity generation has a strong role to play in promoting innovation and enabling diversification by business.

Significant support has been provided to the non-domestic microgen grant, NDMG, operated by the Sustainable Energy Authority of Ireland, SEAI, on behalf of the Government. This provides financial assistance to help businesses and other sectors to install solar PV panels to generate electricity on site. Through this scheme, grants are available for renewables self-consumers above 50 kW and up to 1 MW, up to a maximum of €162,600. From its launch in 2022 to September 2026, this scheme has supported 3,300 installations totalling over €34 million and the Minister is ambitious to grow this scheme.

Associated with these schemes for homes and businesses, the clean export guarantee, CEG, provides an opportunity for micro and small-scale generators to receive payment from their electricity suppliers for excess renewable electricity they export to the grid, as the Deputy has detailed about his constituents in Galway East. The payment from the electricity suppliers is intended to reflect the wholesale market value of the electricity. Applicants can receive both the NDMG and the CEG on an ongoing basis. The flat-rate CEG tariffs on offer from suppliers have generally ranged from circa 16 cent per kilowatt hour to 25 cent per kilowatt hour. Responsibility for the regulation of the electricity and gas markets, including regarding the clean export guarantee, is solely a matter for the Commission for Regulation of Utilities, CRU, which was assigned responsibility for the regulation of the Irish electricity and gas markets following the enactment of the Electricity Regulation Act 1999.

In line with long-standing policy on deregulating price setting, the CRU ended its regulation of retail prices in the electricity market in 2011 and in the gas market in 2014.

Price setting by electricity suppliers, including remuneration for microgeneration for householders and businesses, is a commercial and operational matter for the companies concerned. In June 2024, the CRU published its decision paper Clean Export Guarantee: Enduring Arrangements to Remunerate Customers for Microgeneration Exports. It confirmed in that paper that it is of the view that the competitive approach whereby suppliers set their own competitive export tariffs has functioned well and will continue.

I am aware, as is the Minister, that there has been some concern that tariffs may diminish. I stress that the Minister has no information which suggests that this is the case. Notwithstanding that, as part of our energy transformation it is important for businesses and households to have maximum flexibility and control in how they consume electricity. As the Deputy mentioned, for that reason the Minister earlier today announced new grants for the installation of batteries. The Deputy raised some serious concerns and offered a proposal that I am not in a position to provide an affirmation on. I will of course refer that back to the Minister, Deputy O'Brien.

Comment on this

I really appreciate the clarity provided in that detailed response. It definitely raises the question about looking back at what has happened in that time since the CRU stopped regulating energy. There are a lot of energy providers and competition in the market. There is also a lot of renewable generation happening. The most concerning thing in the response was the statement to the effect that "price setting by electricity suppliers, including remuneration for microgeneration for householders and businesses is a commercial and operational matter for the companies concerned." Right now, it makes sense for them to pay for the supply that comes from solar during the summer because it provides power to the grid. It is available and they can buy it relatively cheaply compared with what they would pay on the wholesale market. A problem could arise whereby if a huge number of homes have a large amount of electricity to export, on most peak export days the relevant commercial entities will not want to buy all of that electricity if it cannot be stored. I may be barking up the wrong tree here. We need to have a bigger conversation around storage.

I again welcome the grant announced earlier today. It is going to be absolutely fantastic because it will make it easier for people to decided to also install batteries when they are initially putting in solar panels, because the grant is there for that. I ask the Minister of State to take the message back to the Minister, Deputy O'Brien - I will relay it to him as well - that we have to protect people who are supplying electricity to the grid. Regardless of whether they are small businesses, farmers or domestic households, they deserve to get a fair price for their electricity.

Comment on this

As I have set out, the electricity and gas retail markets in Ireland operate within a European Union regulatory regime wherein electricity and gas markets are deliberately commercial, liberalised and competitive. Responsibility for that regulation of the electricity and gas markets, including in the context of the CEG, is solely a matter for the CRU.

Regarding the development of tariffs under the CEG arrangements, the CRU is of the view that the competitive approach whereby suppliers set their own competitive export tariffs has functioned well. However, if communities, farmers or others wish to pursue an export-only project, the small-scale renewable electricity support scheme provides a fixed 15-year tariff for the development of smaller scale solar and wind energy projects up to 6 MW. This tariff is set by the Minister. However, such export projects are not eligible for the separate CEG, which is a payment for self-consumers only.

On the matter of the CEG, it is important to stress that I am aware that there has been some concern around remuneration levels diminishing significantly. I emphasise once more, not necessarily for Deputy Dolan but for those outside the House, that the Minister has no information which suggests that this is the case. Separately, however, a battery energy storage system means that businesses and households can maximise the benefit they get from the electricity they generate. When the Deputy talks about the parallel conversation on storage, this is perhaps the moment to move into that in greater detail. That will require very real infrastructural investment, not just by individuals but also by the State on a larger scale. A broader discussion will also be needed. This is partly why the Minister announced the new grants earlier today. Batteries provide greater flexibility in that they allow homes and businesses, if it is more favourable for them to do so, to retain the electricity generated on site for their own use rather than relying on exporting it to the grid. The Deputy raised some very real concerns which I hope I have gone some way to assuage this evening. I will bring the matter directly to the attention of the Minister, Deputy O'Brien.

Comment on this