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 looks more and more like a mortgage repayment is about to escalate even more.
Some have already said they received utility bills two to three times what they paid last year.
However, the very structure that’s costing us that money — our homes — could be the key to lowering our bills and even making money in the process.
The government has introduced a program in recent months allowing homeowners to sell excess energy generated by 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 from solar power by 2030.
It is hoped that the Microgeneration Support Program (MSS) could contribute about 380 MW (megawatts), which would roughly equate to more than one million solar panels on about 70,000 buildings.
Legislation authorizing the program was signed into law in February before taking effect in July.
Under the MSS, households can receive payment per kilowatt-hour of additional energy they produce and sell back to the grid.
And payments could be backdated to mid-February, or when the microgenerator became eligible for the program if after that.
Many providers have yet to start payments, despite promising to start in August, but the payment process is expected to start soon.
So how many households produce their own energy?
According to a study by the MaREI Center at UCC, around 24,000 homes have already started the transition to solar.
The study concluded that up to 1 million homes in Ireland could realistically switch to solar power by 2030, significantly higher than the government’s own targets of installing 250,000 new solar systems on roofs on this date.
They did the calculation using the total number of houses with enough roof space for ten solar panels and with proper orientation while excluding vacant properties and apartments other than those on the upper floors of the complexes.
This equates to enough energy to power one in four Irish homes, he concludes, meeting around 8% of our renewable energy targets while eliminating around 135,000 tonnes of greenhouse gas emissions.
How much does the installation of solar panels cost?
There are many variables, including the size of the house, the number of panels that can be installed and the amount of energy you want to generate with your solar panels, but the standard installation of around 6 panels costs around €5,000 .
A grant of up to €2,400 (depending on the size of the system and the amount of electricity it generates) is available from the Sustainable Energy Authority of Ireland, bringing the expenditure down to around €3,000. € for the standard project.
The advantage for the typical family would be that it produces up to 40% of the annual electricity needs of the household, which would compensate between 400 and 450 € per year – and even more in the current tariff climate.
“If you offset about €400 on your electricity, the payback is somewhere between 7 and 10 years,” estimates Paul Deane, principal researcher on the future of clean energy at the MaREI Center in the UCC estimates.
“That’s a relatively decent return on investment because once the system pays for itself, you’re producing free or low-cost energy for the next 20 or so years,” he added.
This return could potentially be greatly accelerated if energy costs remained at their current level.
If I don’t cover all of the property’s energy consumption, how could I generate excess energy for the grid?
Power generation from solar energy works on a “use it or lose it” basis.
So much of it already ends up returning to the network, essentially for free.
This new system will essentially reward the owner for his contribution to the country’s electricity production.
Some households will have an inverter installed which will direct some of the excess energy to produce hot water, for example.
It can also be sent to storage batteries which will store some of the excess energy.
However, the more energy retained in the home, the less it returns to the grid for which the homeowner can be rewarded.
Again, in light of today’s energy costs, retaining as much energy as possible in the home is probably best.
The government recently scrapped the €600 subsidy for battery storage ahead of the introduction of the MSS which will reward households for their energy contribution.
How much could I get to generate 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 up to 20 cents.
Many variables govern what a microgenerator might resell to the grid, including the size of the home, the number and size of solar panels on the property, and the amount of power they are able to produce and use.
500 excess units at the rate of 13.5 cents, for example, could be worth €67.50 while 1,000 excess units at the rate of 20 cents could amount to €200. An even larger system, capable of exporting 1,500 surplus units at the rate of 20 cents, would be worth €300.
The first €200 is tax exempt, but anything over that amount will be taxed as income.
It’s not a king’s ransom, but when the home is already on track 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-benefit ratio, it will collectively make a significant contribution to achieving the country’s renewable energy and carbon reduction goals.
Will the grants be there for the long haul, or should I do it ASAP?
In light of the rate at which energy costs are rising, it could be a wise investment in the home right now, especially if there is excess cash on hand.
“Every kilowatt-hour you don’t have to buy is a saving,” said Pat Smith, president of the Micro-Renewable Energy Federation.
“If you install solar PV, it will be the only investment in your home that will give you an annual payment for any overpayment to the grid, which will reduce a rising energy bill and improve the value of your home given its resale value,” he added.
He said he believes eliminating the battery subsidy is a regressive step that could signal further reductions in subsidies in years to come as more people seek to install the technology.
He argued that the grants should increase in value as the cost of installing solar technology was steadily increasing across the world.
He also criticized the decision to end subsidies for solar panel installations by companies, a decision which he said “makes no sense”.
“They will benefit from the feed-in tariff, but they are denied subsidies and aid to adopt microgeneration in the future,” he explained.
“We have hundreds of businesses that are under immense pressure. The government should provide easily accessible grants to all businesses to try to get them to produce renewable energy,” Pat Smith explained.
He added that solar microgeneration was a “quick fix” and could be implemented very quickly.
“The offshore wind could be in 5 or 6 years,” he pointed out.
Solar is also relatively low maintenance compared to wind generation because there are no moving parts and generation is considered predictable.
Although we don’t live in the hottest or sunniest climates, despite beliefs to the contrary, we do get quite a lot of natural light in this country.
In addition to exploiting it for our own domestic energy needs, we will soon be able to earn a small income from it.