Solar pilot scheme results point to 20% lower dairy farm electricity bills

A Co Kilkenny dairy farmer is showing the way forward to low carbon agriculture, with his own solar farm, on course to reduce his annual dairy farm electricity bill by 20%.

He is working with Elgin Energy, who decided to launch a pilot scheme to examine how solar PV can reducing emissions and costs.

Data from the project is being examined to understand how solar PV interacts with the energy demand of a busy dairy farm.

Kilkenny dairy farmer Cathal Moran agreed to take part in the scheme, and the ground-mount solar array was installed on his farm at Skeoughvosteen, in the east of Co Kilkenny, near the Co Carlow border.

Mr Moran said: “Consumers are demanding sustainable practices are adopted, this is being passed through the supply chain and farmers are now trying to identify how they can best meet this demand. Solar is the perfect solution, because it is easy to install, and it will reduce both my electricity bill and my carbon footprint.”

A planning application was lodged with Kilkenny County Council at the end of November 2017, and planning permission was granted in March 2018. There are planning exemptions for smaller renewable energy projects, but the Skeoughvosteen project covers about 392 square metres (about one-tenth of an acre), and thus required planning permission for details of planning exemptions for renewable projects.

If you want to install a solar PV project, you need to send an application to the ESB.

Dependent on the size of the project, and if it will export electricity to the grid, you may require a grid connection offer. For this project at Skeoughvosteen, a grid connection offer was not required.

The NC6 form required for self-consumption (no energy exported to grid) projects was sent to the ESB in April, 2018. This is the requirement for installations under 11kW (3-phase) or under 6kW (single phase). There are different requirements for larger installations, or if energy will be exported to the grid.

For example, G10 protection is required for larger installations. This equipment enables the solar farm to be turned off. It can cost up to €5,000, and a “witness test” with ESB is needed, to ensure the G10 works.

Elgin Energy partnered with Activ8 Solar Energies to install the solar array in June 2018. They used a ground mounting system manufactured in Italy, consisting of a lightweight steel frame driven into the ground, without concrete or use of piling rigs.

The panels are then mounted onto the frame, and connect directly to the farm’s fuse board, via underground cable (the solar array supplies electricity to the dairy parlour only).

Complete installation, including trenching for the cable, installation of the structure, and grid connection, took three days, for a total cost of €15,000 for the system and for labour. Installation of the structure and solar panels took only one day.

The Skeoughvosteen dairy farm has two heavy energy usage intervals, at the morning milking time of 5 am to 6 am, and the afternoon milking time around 3 pm.

According to Elgin Energy, the first milking of the day cannot be powered by solar energy, because energy generation in the summer months begins at about 7 am, and at 9 am in the winter months. Solar PV energy production starts slowly, as the sun rises, and peaks at midday.

Since mid-June, 2018, data was monitored and gathered via a current transformer clip on the cable entering the fuse board.

The data is uploaded via a SIM-enabled device to an online platform.

Elgin Energy says the project over-performed significantly across the summer months of 2018, especially during the heatwave in June and July.

The total demand for electricity used by the farm from July to December was 35,900kWh. The solar installation produced 5,000kWh (which would be enough to power more than one home for a year, and to offset two tonnes of carbon dioxide), and 3,500kWh of this was used on the farm.

When more energy is being produced than used, surplus energy is “spilling” to the grid, free of charge. Currently, in Ireland, there is no Feed in Tariff (FiT) to facilitate payment for electricity exported to the grid.

When the project was installed, it was estimated that it would reduce the annual electricity bill by 20%. It is on track to meet this target, with a saving of €630 achieved in six months. Based on six months of data, annual savings on energy costs come to €1,260 (at the Electric Ireland electricity rate of €0.18/kWh, including VAT).

According to Elgin Energy, the equipment costs for an 11kW system, of €14,500, can be reduced to €11,600 by a TAMS II 40% grant, or to €10,150 by a TAMS II 60% grant.

Application for TAMS II grant aid can be made under the Animal Welfare, Safety and Nutrient Storage Scheme (40% grant), or the Young Farmer Capital Investment Scheme (60% grant)

With annual electricity bill savings of €1,260 (based on six- month data), the payback period is calculated at 11.5 years (no grant), 9.2 years (40% grant); or eight years (60% grant).

Accelerated Capital Allowances (ACA) has not been included in these calculations, as it depends on annual income. However, ACA can be claimed at 100% in the first year of purchase.

Accelerated Capital Allowance is a tax incentive encouraging investment in energy saving technology.

Based on the long-standing ‘Wear and Tear Allowance’ for investment in capital plant and machinery, whereby capital depreciation can be compensated through a reduction in an organisation’s tax liability, the ACA scheme allows a sole trader, farmer or company that pays corporation tax in Ireland to deduct the full cost of the equipment from their profits in the year of purchase.

As a result, the reduction in tax paid by the organisation in that year is currently 12.5% of the value of capital expenditure.

By contrast, the Wear and Tear Allowance provides the same tax reduction, but this is spread evenly over an eight-year period.

For farmers interested in reducing domestic electricity bills, a domestic rooftop grant was introduced in August 2018 by the Sustainable Energy Authority of Ireland. It provides a contribution of up to €3,800 towards total installation costs.

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