‘Solar energy system will pay for itself in three years’ says expert

by Rachel Cunningham
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Rachel Cunningham

Dublin businesses switching to solar power can expect their new energy system to pay for itself two years earlier than government predictions, an expert has claimed.

The Department of Environment, Climate and Communications has claimed that  the grants, operated by the Sustainable Energy Authority of Ireland, will “support 20 to 30 per cent of the investment cost, reducing payback to as little as five years”.

However, the co-founder of the solar PV firm Swyft Energy has said that some businesses could see payback in three years.

Adrian Casey said a medium-sized business consuming 42,000 units per year at a rate of 36 cent per kilowatt/hour (kWh) could reduce its energy bills by up to €8,000 per year by installing a 30 kilowatt (kWp) system. 

Prices for a 30kWp system, he said, start from €32,000.Amendments to the grants unveiled by Environment Minister Eamon Ryan on July 4 reduced the cost of install of such a system to €23,400, which means that firms paying the 36c rate could expect payback in three years, Mr Casey said.

“On average, small-to-medium sized businesses are installing 30kWp Solar PV systems, equivalent to 64 panels, covering 128 square metres,” Mr Casey explained.

“This type of system generates roughly 26,000 units of electricity per year and, depending on the business’s electricity consumption pattern, 70 to 80 per cent of this power would be used on site, with the excess electricity sold back to the grid.”

He highlighted that larger premises, such as warehouses consuming 200,000 units per year at a 23 cent electricity rate, could generate around 135,000 units with a 150kWp, 320-panel system.

“This type of system costs €145,000 and would reduce annual energy bills by around €25,000,” Mr Casey said.

Previously, businesses of this size could expect payback in six years.

“With the new announcement, a 150kWp system will receive a grant of €32,600, reducing the cost to €112,400 and the payback to four-and-a-half years,” Mr Casey said.

Firms that install a new solar PV system can also benefit from the Accelerated Capital Allowances (ACA) scheme, whereby the cost of the system can be offset against profits to reduce companies’ tax bills.

“Solar PV is one of the only purchases that a company can claim 100 per cent of the ACA in the year of purchase,” Mr Casey said.

Switching to solar power also helps businesses improve their carbon footprint and environmental, social, and governance (ESG) profiles, he added.

“A 30kWp system will reduce CO2 output by roughly 10 tonnes per year or 300 tonnes over the 30+ year lifespan of the system. That is equivalent to planting 2,800 trees,” he said.

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