New Research Shows Residential Solar Power Offers Win-Win
29 Aug 2017
Government renewable energy scheme must include support for household solar power
New research by climate policy expert Joseph Curtin has found that solar panels on homes and businesses can make a significant contribution to Ireland's switch to clean energy. The cost-benefit analysis was commissioned by Friends of the Earth in advance of the Government's new support scheme for renewable electricity, which is due to go to public consultation in the coming days. The study finds that support for solar power on 50,000 homes can be done at a reasonable cost and in a fair way, and addresses a number of concerns about small-scale solar. Friends of the Earth says it means the Taoiseach and the Minister for Environment must keep their promise to support solar power for ordinary citizens not just big business.
Joseph Curtin, the author of the report, said:
"Solar power offers many benefits for citizens, and is a potentially vital component of the flexible and responsive energy system of the future. Our financial modelling suggests that a generation tariff of about 10 cent per kilowatt of electricity would be required to make rooftop Solar PV attractive for householders.
"Electricity bills would be reduced by allowing householders to generate their own electricity, but they must also be able to sell to the grid what they cannot use themselves. To control overall costs to Government, we propose that the scheme is initially capped at 50,000 householders. The scheme we propose would likely be broadly attractive, and not just for the wealthy."
Commenting on the research, Oisin Coghlan, Director of Friends of the Earth, said
"The Government has promised to put citizens and communities at the heart of the transition to a clean energy system and this research shows that solar power is the key to unlocking citizen participation.
"A year ago this week Leo Varadkar signed the Friends of the Earth petition for a fair payment for solar power. And Denis Naughten has assured me he wants to see support for rooftop solar.
"This research shows that paying households for the solar electricity they generate can be done at a reasonable cost and in a fair way.
"Now is the opportunity for the Taoiseach and the Minister to deliver. So why the delay in publishing the new support scheme for renewable electricity?
"We're really concerned that some economists with no interest in public participation, and big power companies who want to keep the market to themselves, are telling the Government not to pay households and communities for the electricity they generate. To leave it to the 'big boys' to provide Ireland's renewable energy. We have the seen the limits of that strategy with wind power. We don't want to repeat the same mistake with solar energy.
"We have to hope that politicians will follow the evidence and the public interest not the special pleading of vested interests."
The case for an incentive scheme for rooftop solar PV
- This paper provides supporting evidence for the introduction of a support scheme for residential solar PV, and addresses arguments that have been put forward against a tariff. Supported by financial modelling, it makes specific design proposals to Government.
- Along with commercial and ground-mounted solar, residential rooftop solar PV offers many advantages for the grid, bill-payers and citizens, and enhances social buy-in for decarbonisation.
- Our findings suggest that a generation tariff of 10 cent combined with an export tariff of 6 cent would be sufficient to incentivise deployment of rooftop solar, particularly for early adaptors.
- If restricted to 50,000 rooftops by 2030, the additional cost to the Public Service Obligation (PSO) would be small relative to its overall size (circa €12.5 million per annum), representing a cost of about €20 t/CO2 abated.
- Our proposed design is cost-effective, based on international best practice, and future proofed by offering a marginal incentive for home consumption. Cost effectiveness could be further safeguarded, however, by ongoing monitoring or through a built-in digression mechanism.
- Arguments that this scheme could cross subsidise wealthy households lack empirical support. International evidence suggests that poor, average and wealthy households all chose to invest, and evidence form Ireland (from up-take of grants) suggests that the schemes would be attractive to a broad cross section of society.
- The net costs and benefits to the overall energy system of domestic generation require future evaluation. Where detailed analysis of these costs and benefits has been undertaken (e.g. the UK) the grid services provided by domestic generations (e.g. peak shaving) are found to be substantial. We recommend further analysis on this point, but that in the interim, unsupported arguments that posit large overall systems costs should be avoided.
- Rooftop solar PV, especially combined with battery storage technologies, are potentially disruptive to business models in the energy system. Over the medium to longer term this may necessitate a rethink of how the costs of the energy system are shared between users.
- Blocking citizens from generating energy, however, is not the answer. Ireland should be preparing for a flexible modern networked grid of the future, which offers many potential benefits as well as risks that need to be managed.
1) Joseph Curtin is Senior Research Fellow with responsibility for climate change policy at the Institute of International and European Affairs, a Research Fellow at University College Cork, and a member of the Climate Change Advisory Council. This analysis has been conducted as an independent researcher.
2) The Government's new Renewable Electricity Support Scheme is due for publication by Minister for Climate Action and Environment, Denis Naughten TD, in the coming days.