Rising energy costs have led many NI dairy farms to consider installing renewable technologies, even though there is no incentive scheme in place for new installations.
Demand for on-farm renewables effectively vanished when the NI Renewable Obligation (NIRO) scheme closed in 2017, but there has been a turnaround in recent months.
“In the last six months, enquiries from farmers have taken off again,” said David McGookin, commercial manager at renewable energy firm Solmatix.
The cost of solar photovoltaics (PV) has fallen considerably since the NIRO scheme was first launched in 2005 and this has helped make new installations feasible on farms in the absence of government incentives.
At current electricity prices, he said these solar panels could lead to a saving of around £10,000 per year, meaning a payback of three and half to four years
McGookin gives the example of a 50kW solar PV system for a 150-cow dairy farm which typically has an installation cost of £35,000 to £40,000. At current electricity prices, he said these solar panels could lead to a saving of around £10,000 per year, meaning a payback of three and half to four years.
However, he makes clear that every farm is different, and farmers with a high electricity demand, especially in the middle of the day, get the best return from solar PV. This includes the likes of high input dairy farms that are milking three times a day, or units with robotic parlours which run 24/7.
“If a farmer milks twice a day and has a daily milk collection at around 10am, there won’t be a massive demand for power from mid-morning until evening milking. In a case like that, there will still be a big electricity bill, but solar isn’t going to be the answer for that farm,” McGookin said.
In the past, as well as getting a government incentive for every unit of power that was generated, any renewable electricity that was not used on the farm could be sold to the national grid.
However, grid connections for small scale renewables are no longer available in NI so it is important that the capacity and pattern of electricity generation from new installations matches power demand on the farm.
You can get a device called a power diverter which can manage electricity demand
Various options are available to dairy farmers to help them get the best use out of renewable electricity that is generated on-farm.
“You can get a device called a power diverter which can manage electricity demand. Say if the plate cooler and bulk tank are switched off, it will turn on immersion heaters in your water cylinders, so you have hot water for parlour washing,” McGookin explained.
Batteries are a potential option to allow renewable electricity to be stored and utilised when needed, but there is limited demand for battery technologies in NI at present.
The other issue is that there tends to be little surplus electricity generated during winter months
McGookin said that batteries are still expensive and a typical 20kW battery could more than double the payback period for a solar PV set up, taking it from under four years to eight or nine years.
The other issue is that there tends to be little surplus electricity generated during winter months and, as batteries require constant use, electricity from the grid will be needed to charge them.
Most of Solmatix’s farmer clients have opted for solar panels on shed roofs because, unlike ground mounted panels, they do not require planning permission or a lot of digging to bury cables. For installations over 12kW in size, a three-phase electricity supply is recommended to maximise output from the system.
Solar panels should ideally be placed on a south facing roof, but McGookin said this is not essential as panels positioned in any direction will generate power.
There is a different solar radiance across NI
Climate is another factor that can affect output from a solar PV installation and this can vary significantly across relatively short distances within NI.
“There is a different solar radiance across NI. If you had 50kW panels on a farm in Enniskillen, and you had the same system on a farm in Downpatrick, it could be generating 25% more than the one in Enniskillen,” McGookin said.
Solar PV installations require relatively little maintenance or servicing. McGookin recommends washing the panels every few years with warm soapy water and points out that Solmatix give a 25-year performance warranty with new installations.
Although there is no government incentive for renewable electricity generation, tax breaks are available.
For businesses that are sole traders or partnerships, 100% of costs can be deducted from taxable profits for income tax calculations, similar to plant and machinery purchases.
Farm businesses that operate as limited companies can avail of the UK government’s “super deduction” where a capital allowance of 130% is available for qualifying investments, including solar panels.
This means that for every £10,000 that is spent on an eligible investment, £13,000 is deducted from profits for corporation tax calculations.