Solar energy still booming, but it’s not insulated from headwinds
Dijanei De Silva, head of operations solar PV firm Greenco in Galway, and .David Duffy, chief finance officer at Greenco, visited several key suppliers in China.
Momentum is expected to continue for solar development, often hailed as the most successful piece of the Irish renewables industry, after a significant boost in the recent Budget.
However, after years of record growth, some obstacles threaten progress.
Most of this investment was allocated to strengthening the grid, which has been a key concern for industry experts, as the underdeveloped electricity grid currently drives up the cost of corporate power purchase agreements (CPPA).
Budget measures included a €3.5bn capital allocation to ESB and EirGrid and the extension of the €400 income-tax exemption for micro-generation exports.
The Government also increased the Sustainable Energy Authority Ireland, or SEAI’s, capital budget to €558m, a massive €89m jump on last year, for residential and community energy upgrades, including solar PV.
Industry body Solar Ireland urged the Government to confirm that this expanded allocation will allow grants for domestic rooftop solar to remain at their current level of €1,800 under the Microgeneration Support Scheme, in an effort to maintain the pace of development.
Ireland’s installed solar capacity is now at 1,911 MW, including more than 800 MW from rooftops. Solar has become a vital part of the Climate Action Plan, which sets an ambitious target of renewable generation accounting for 80% of demand by 2030. Solar energy is expected to account for 8GW of power by 2030 under the plan.
Solar panel installations have become a popular climate measure for both industry and households to save and be more energy efficient and secure. The minimum price for PV systems comes to around €5,000, while grants cut the cost further.
A recent survey by professional services firm Deloitte showed 60% of respondents said they have adopted some solar electricity generation.
Solar PV is not as impacted by chronic planning delays and biodiversity debates that often halt the progress of onshore and offshore renewable energy projects.
Meanwhile, the development of a solar farm can cost between €600,000 and €900,000 per MW, depending on prevailing market conditions. Input costs include materials such as panels, and labour.
Although Ireland’s solar business has boomed, it is not completely insulated from domestic and international challenges.
Grid capacity and curtailment are Europe-wide obstacles that can hinder further solar energy development, as well as global finance and supply-chain pressures, said Dijanei De Silva, head of operations for commercial solar PV firm Greenco based in Galway.
Mr De Silva previously worked on utility-scale solar in Brazil before joining Greenco. Since working in the Irish space, he said some issues are more isolated to Ireland than others.
“Ireland typically involves broader community consultation, environmental screening as well as visual and heritage assessments, even on relatively small sites,” he said.
In terms of grid issues, experts have also demanded more infrastructure for energy storage, as much of the energy generated by solar in the summer months has nowhere to go. This can result in consumers relying on fossil fuels during the colder months.
Mr De Silva said other challenges included “fragmented land ownership, coastal and rural landscape sensitivity, older local networks in some counties, and resourcing across authorities and utilities relative to the pipeline”, he said.
“Curtailment is likely to be a key theme as the 8GW target requires timely substation and transmission upgrades,” he added, reiterating concerns others have shared about the functionality and capacity of the grid system.
Some solar installations are hit with ‘not in my back yard mentality’, or NIMBYism, but he said “public-awareness efforts could support social acceptance by highlighting environmental and economic benefits.
These challenges may slow down the pace of solar development substantially.
Chief technology officer and chief finance officer at Greenco, David Duffy said the level of customers looking for solar farm installations is rising and “the resistance and apprehension from Irish landowners also seems to be melting, especially when land owners realise that they can still farm sheep in conjunction with their solar.”
Despite growing demand for solar, the Irish market has proven to be a difficult one for developers. High developer risk profiles and long development timelines can be deterrents for potential investors.
However, the most recent State auction strike price for solar projects was €100.63/MWh, a decrease from €104.76/MWh in the previous auction. This price remains high compared to the European average of around €60-70/MWh, but the decline may spark further interest from industry stakeholders.
“On a trade visit to China at the end of last year, there was a measurable buzz when we mentioned we were from Ireland. They projected a significant increase in demand here,” said Mr Duffy.
Solar developers secured notable deals in the Irish market this year despite international and domestic headwinds.
Among these was the landmark solar energy deal signed by Bord Gáis Energy to become Ireland’s largest solar power off-taker, following an agreement with Strategic Power Projects (SPP).
The long-term power purchase agreement (PPA) is expected to generate 1GW of solar energy.
The agreement is broken down into four projects in counties Tipperary, Clare, and Offaly. These solar farms are expected to generate enough electricity to power an estimated 100,000 homes annually.
Looking ahead to next year, there are several major solar projects underway.
Danish renewable energy giant Ørsted committed to the Garrenleen solar farm in Co Carlow after the firm acquired it from Terra Solar. The development will be delivered in two phases. The first phase will generate around 81MW and the second 79MW phase is set to be completed in 2026. The entire 160MW farm will be capable of providing electricity to 56,000 homes when it’s fully operational.
In Cork, the 120MW Ballyroe farm under Soleire Renewable SPV has yet to begin construction but has received planning permission following a successful bid in the second State auction for onshore renewable energy projects.
ESB Networks is underway with its 101MW solar park in Traceystown Co. Wexford. The project was the biggest solar PV development in the third State auction for onshore renewables. The Park is set to be operational and producing electricity by June 2026.
Also anticipated to come online next yeat is the 100MW solar PC park in Ballymoneen Co. Galway.
Industry expert and VP for development and offshore at Statkraft Ireland Donal O’Sullivan said he expects solar to continue to contributing strongly in the Irish energy mix.
He added that the recent onshore renewable energy results showed there was 1.2 times the amount of solar capacity at 829GwH successful as there was wind capacity 670Gwh, which gives an indication of strong solar performance.
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