Many of Ireland’s new solar farms receive 15-year Government support via the Renewable Electricity Support Scheme. However, the minimum size of solar farm which can qualify for this support is 500kW, or 2.5 acres worth of panels.

This scale of an investment is out of reach for many farmers. However, the introduction of the microgeneration support scheme (MSS) last year is expected to make small-scale solar PV systems much more attractive.

The aim of the MSS is to encourage the installation of solar PV systems of up to 50kW in size to generate electricity for on-farm use. Electricity which is surplus to requirement will be exported to the grid and receive a premium rate (€0.135c/kWh) or the going market rate.

This article explores the economics of developing a 50kW solar farm with the intention of only exporting electricity to the grid.

A solar farm of this size would require about 0.25ac.

Solar PV system

For the purposes of this example, we are assuming that the electricity from this 50kW solar farm would receive the Clean Export Premium at a guaranteed rate of €0.135c/kWh for 15 years for 80% of its output. The other 20% would receive the wholesale market rate, expected to be between €0.09c/kWh and €0.10c/kWh.

This would need a maximum import capacity of at least 50kVA and likely bigger, as well as full planning permission and a grid connection under the NC-7 process.

The cost of the PV equipment would amount to around €65,000 plus VAT. Grant aid for a project like this remains unclear. TAMS II or EXEED funding would not be available for this project as the system is developed purely for export.

For the purposes of this example, we have included Better Energy Communities (BEC) funding at 25%.

However, there may be an issue with this funding as the project is not tackling an energy efficiency problem, but is instead being developed as an investment opportunity.

Payback

Even if grant aid towards the capital cost of this solar farm was secured, payback times are still in the region of eight years. This is because the electricity isn’t being used to displace expensive imported electricity on the farm which would help reduce payback times.

The system in this example would generate 45,000kWh per annum for export, dropping to 43,406kWh by year 10. This would generate between €5,800 and €6,000 in income per year.

Generation potential also varies depending on location and orientation.

While this payback timeline may be too long for some, others may see this as a viable investment opportunity. As always, professional advice is required.