Is Solar PV A Viable Option For Your Farm Electricity?

The ability to sell excess electricity to the grid, currently for more than 20c/kW, is making solar PV an attractive proposition for many farmers, writes rural accountant Kieran Coughlan.

There is a genuine interest from farmers as to whether solar PV panels or Solar Photovoltaic to use its full title are a worthwhile investment. 

For the uninitiated, Solar PV is the electricity generation panels as opposed to the other types, which are used to heat water. 

The PV panels work by converting daylight into electricity, which can be either used directly on the farm, fed into the electricity system on the farm through a piece of apparatus called an inverter, or alternatively, the electricity can be exported to the grid.

Aerial view of farm building with photovoltaic solar panels mounted on rooftop for producing clean ecological electricity. Production of renewable energy concept. The ability to sell excess electricity to the grid, currently for more than 20c-kW, is making solar PV an attractive proposition for many farmers, writes rural accountant Kieran Coughlan

The inverter converts the electricity from direct current produced by the panels to alternating current, that latter type being the same type of electricity as supplied by your electricity provider.

There is a range of systems available, but for the majority of farmers who are on a single-phase electricity supply, the option that is most commonly considered is around a six to eight-kilowatt system.

I spoke recently to Paddy Rose of Clonakilty-based Advance Heating and Energy Systems Ltd, who said there has been a huge upsurge in interest among farmers in solar systems.

The interest in solar is coming from a variety of routes says Paddy. The cost of electricity over recent years is one of the leading factors which Is leading to some farmers wishing to make themselves more independent, farmers are also increasingly conscious of their carbon footprint are looking to do the right thing. 

“Another key factor is the ability to sell excess electricity to the grid, and presently the price available for exported electricity is north of 20c/kW, depending on the electricity provider, making solar PV an attractive proposition.”

In a good location and with the correct orientation, Paddy suggests that a 7.5kW system is capable of generating nearly 6,000 units of electricity per year.

To put that in context, the average household would use around 4,200 units of electricity per year, whereas a 100-cow dairy farm might usually use something between 20,000 and 30,000 units per year.

A standard 7.5kW system will not allow such a farm to go off the grid, and in reality, it will also mean that the farm will still be reliant on electricity imported from the grid regardless of whether batteries are installed or not as the electricity drawdown from batteries is also subject to some restrictions.

It will also mean a backup generator is a must on a dairy farm, and the amount of electricity produced at any one time is unlikely to be enough to run a milking parlour and milk tank in the event of a power cut.

However, it is interesting to note that in the normal course of events, the aforementioned inverter will, at such times of heavy electricity usage, effectively blend in what is supplied by the PV panels and supplement any shortfall with bought in electricity this means whatever electricity is produced on-farm is used in priority but looking to the grid to make up the difference. But with that all said, the crunch question is whether Solar PV is a viable option.

Solar panels are a great investment – if you can afford them. Photo Getty.j

Does It Stack Up?

Based on current costings and export price movements and absent of any grants, the payback period for an installation is about six to seven years and shorter, in the case where the system is generating electricity that can be used directly on the farm where that generated electricity is replacing what would otherwise be more expensive bought in electricity. 

This is further enhanced when the household is also connected to the same supply as the farm, as it increases the probability of home-produced electricity being used ahead of being exported.

The expected lifetime of PV systems is about 20-25 years, and the answer is firmly a yes in terms of a cost-benefit analysis.

“Furthermore, farmers who invest in solar PV systems can write off the full cost of the system in one year for tax purposes where the system qualifies for accelerated capital allowances, and the VAT on installation costs are recoverable for both VAT-registered and unregistered farmers. Grants are available for solar installations, including battery storage under the TAMS scheme”. 

Paddy is quick to point out that each system is farmer-specific, depending on their electricity usage, their existing supply (single to three phase) the maximum electricity export capacity, which determines the amount that can be exported to the grid (which can, for instance, depend on the amount of other solar installations in the systems). 

Larger installations may require planning permission, albeit the majority of smaller systems should fit within planning exemptions. 

Some neat apps are available which allow a farm or house owner to monitor how their system is working and what it is generating for them, how much of that is being used and how much is exported. As always, each individual should obtain professional advice relative to their own circumstances.

(Source – Irish Examiner – Farming – Kieran Coughlan – 07/05/2024)

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Rural Enterprise Skillnet
Rural Enterprise Skillnet

The Rural Enterprise Skillnet is funded by member companies and the Training Networks Programme, an initiative of Skillnets Ltd. funded from the National Training Fund through the Department of Education and Skills.

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