The Minister for the Environment, Climate and Communications will bring a proposal to scrap VAT on solar panels to the Cabinet for sign off next week.
Minister Eamon Ryan wants to get rid of the current 23% VAT rate on solar panels which would significantly lower the cost of installing solar panels – a move which the minister believes would encourage more people to invest in them.
Minister Ryan has previously said that he believes solar presents a “huge opportunity” for farmers.
Farmers can currently apply for grant aid to install solar PV on their rooftops under the Targeted Agricultural Modernisation Scheme (TAMS 3) at a rate of 60% with a ceiling of €90,000.
The Minister for Agriculture, Food and the Marine, Charlie McConalogue, said the solar capital investment scheme (SCIS) will “enable farmers to generate their own power”.
Today (Monday, April 3) an organisation which represents companies and stakeholders involved in the solar energy sector welcomed the proposal by Minister Ryan to reduce the VAT rate on the supply and installation of solar panels on homes from 13.5% to zero.
Pat Smith, chairperson of the Micro-Renewable Energy Federation (MREF), said that the removal of VAT at 13.5% on domestic installations has been largely driven by European Union policy towards renewable energy.
But he believes Minister Ryan’s proposal to reduce installation costs “should help greatly in encouraging homeowners to invest in solar panels to reduce their energy costs and cut carbon emissions from the residential sector”.
“It is critical that the necessary changes to VAT legislation are introduced immediately so that the new 0% VAT rate can be applied straight away,” Smith said.
“There can be no delay as this will distort the market.”
But he has also urged Minister Ryan to ensure that the proposed zero rate is extended to premises of sports clubs, golf clubs, community centres and schools etc.
Smith said the minister needs to “push on urgently to deliver a fair and sustainable renewable energy support structure for businesses so that all stakeholders can play their full part in helping our country meet its challenging climate change targets and international obligations”.