The Micro-generation Support Scheme paves the way for farmers to export farm-produced electricity to the grid and get paid.

The scheme comprises of several different options, depending on your scale and export potential.

While there are multiple renewable technologies eligible for this scheme, rooftop solar PV is likely to be the most popular option.

First, any producer of renewable electricity will have the right to export surplus electricity back to the grid and receive a competitive wholesale market price.

This is called the Clean Export Guarantee (CEG) tariff and will be a deal between the farmer and a suppliers of electricity.

The value of the CEG hasn’t been set yet

Farmers will need an appropriate grid connection to do this, which can be applied for through the ESB.

The value of the CEG hasn’t been set yet, but indications suggest it could land between 8-10c/kWh. Minister for the Environment, Climate and Communications, Eamon Ryan, is expected to sign this into law shortly, with the first payments available after June of this year.

Farms will also be able to avail of a new capital grant from the Sustainable Energy Authority of Ireland (SEAI) for solar PV systems of up to 5.9kW, with a maximum value of €2,400.

The second element of the scheme is for larger renewable systems of between 6kW to 50kW.

These systems will be able to receive a premium price of 13.5c/kwh for electricity exported for 15 years. This is called the Clean Export Premium (CEP) and is supported by the Public Service Obligation (PSO) levy.

Currently, farmers can avail of 40% or 60% grant aid towards the cost of a solar PV system

Systems of this size won’t be able to avail of capital grant aid, but 80% of what they produce and export can receive the CEP. The remaining 20% can receive the CEG.

This element of the scheme is expected to be open by Q3 of this year, with the premium price reducing by 1c/kWh in 2024 and each year thereafter for new entrants. There has been much confusion over TAMS grant aid.

Currently, farmers can avail of 40% or 60% grant aid towards the cost of a solar PV system. For a 10kW system, this is worth between €5,650-€8,500. This methodology differs for pig and poultry farmers however, who are grant aided on an m2 basis.

According to the Department of Agriculture, electricity generated from TAMS-supported solar panels must be used on the applicant’s farm for farming purposes and cannot be exported and receive the CEP of the CEG.

This is at odds with other grant aid available from the SEAI for smaller panels (below 6kW), where excess electricity can be exported and receive the CEG. As the following example shows, this will impact payback time.

Example: 100-cow dairy farm

Looking at a 15kW rooftop solar PV system on a typical 100-cow dairy farm with a single phase electrical connection, this will cost around €18,000 plus VAT and require 50 panels, or a roof space of 83m2. This system will require planning permission.

Based on average generation and efficiency, this system will produce around 12,750kWh/year.

The following two scenarios also avail of accelerated capital allowance (ACA), which is a tax incentive scheme that promotes investment in energy efficient products and equipment.

Scenario 1

In the first scenario, we assume that half of the electricity is consumed on the farm and half is exported and eligible for the CEP.

The import rate of electricity to the farms is assumed to be 24c/kWh, excluding VAT and CEP export rate of 13.5c/kWh, locked in for 15 years.

By also availing of ACA, the dairy farmer will see a payback period of between five to eight years.

Scenario 2

In the second scenario, the dairy farmer avails of the current 40% TAMS grant, uses all of the electricity produced on site and avails of ACA.

In this case, as the electricity being produced is used to displace expensive imported electricity (24c/kWh), the payback period is reduced to between four to seven years.

However, this payback period would reduce further if availing of 60% TAMS grant aid and even further if the farm was allowed to export to the grid and receive the CEG (three to six years).