Farmers to receive ‘fair price’ for selling excess electricity back to the grid under new scheme

Farmers will receive a “fair price” for selling excess electricity they generate back into the grid, under a new scheme that is being developed.

Individuals and communities are invited to submit views on the design of a Microgeneration Support Scheme, Minister for the Environment, Climate and Communications Eamon Ryan has announced today (Thursday, January 14).

This scheme will allow farmers, citizens, business owners and community organisations to generate their own electricity, such as from solar panels on their roofs, and receive “a fair price when they sell the excess into the grid”.

The scheme design also seeks to establish the ‘renewables self-consumer’ model of energy generation and consumption in Ireland, to support community and citizen participation in the transition to a net-zero carbon economy and to contribute to achieving the 2030 targets for renewable energy.

Speaking today, the minister said this scheme “will allow people and communities to become active participants in the energy transition”.

“By producing and selling their own electricity, citizens, farmers, business owners and community organisations can save on their energy costs and reduce their carbon footprint. I urge interested parties to get involved and have their say.”

Public invited to take part in consultation

Microgenerators will primarily serve their own consumption needs, but will be able to receive a payment for excess electricity exported back to the grid.

The scheme will “ensure that there is equity in what supports are offered and how the cost of support is distributed”.

As part of the design, microgenerators must have first met minimum energy efficiency requirements for their properties.

Minister Ryan is inviting the public to take part in a consultation on how the scheme will operate.

Following consideration of submissions to this consultation, a final design will be submitted for government approval, with implementation targeted for July 2021.

This public consultation will remain open until 5:30pm on February 17, 2021.

Five policy options

The department outlines in its documents that there are five policy options proposed for the scheme:

  • Smart export guarantee (SEG) for all installations (old and new);
  • Investment subsidy for new installations as a percentage of total investment costs;
  • Feed-in-tariff based on exported electricity for new installations;
  • Feed-in-premium for exported electricity for new installations only based on difference between viability, gap and smart export guarantee rate;
  • Different eligibility criteria for increased accessibility.

Each of these five policy options were assessed in terms of their effectiveness, costs, funding mechanism and complexity for implementation.

Based on the assessment, the recommended policy option for Ireland is an option that includes an SEG.

The document states:

“It can be provided at near cost-neutrality as the rates are provided by suppliers based on wholesale electricity prices, which also aligns with the European objectives of the Renewable Energy Directive.

Moreover, an SEG is inherently able to provide incentives for self-consumption, energy efficiency and avoids the risk of overcompensation, which are all objectives set under the Irish Climate Action Plan.

“However, as the SEG will not be able to meet the viability gap for domestic rooftop solar (and other technologies and sectors) from 2021 to 2024, it is recommended that the option is supplemented by a feed-in-premium in the first years.”

The department notes that alignment with existing policies “needs to be considered, from both a funding perspective, but also in terms of continuity for sector stakeholders”.