Dáil Éireann Debate, Tuesday - 23 May 2023
174. Deputy Holly Cairns asked the Minister for the Environment, Climate and Communications the steps he is taking to address the rising cost of materials to install solar panels on private residences and farm buildings; and if he will make a statement on the matter. [24345/23]
View answerOn 5th of April 2023 the Government approved an amendment to Finance Bill 2023. As part of this amendment the Government has agreed to apply a zero percent VAT rate within category 10c which is for the ‘Supply and installation of solar panels on and adjacent to public and other buildings used for activities in the public interest, housing and private dwellings.
My Department has estimated that a zero rate of VAT passed on to consumers would reduce the average cost of the supply and installation solar panels for consumers from €9000 to €8000 and would thus help support households reducing their electricity bills. At €0.32c per KWh, this will reduce the payback period for installation from 7 to 6.2 years.
This is a permanent change that came into effect from 1 May 2023. This measure underlines the Government’s commitment to help households to save money on their energy bills, deal with cost-of-living increases and reduce their carbon footprint and contribute positively to our national climate change targets.
The Micro-generation Support Scheme (gov.ie - Micro-generation (www.gov.ie)) is continuing to prove very successful, following record levels of installations supported in 2022 via the Domestic Solar PV Scheme – operated by the Sustainable Energy Authority of Ireland (SEAI). Currently over 50,000 homes have solar panels, with 17,000 microgeneration installations connecting to the grid taking place just last year.
Grants for Solar PV installation under the Microgeneration Support Scheme are administered by the SEAI led by policy from my Department. Decisions regarding VAT, including this most recent decrease and when and how it is applied, are made by the Department of Finance and the Revenue Commissioners. More information can be found on VAT rates relating to the supply and installation of solar panels here: Revenue eBrief No.105/23
