Make a small income from solar energy at home

Most of us have been looking at our gas and electric bills between our fingers in recent months.

And the fear that accompanies the arrival of what increasingly resembles a mortgage payment is about to intensify.

Some have already reported receiving utility bills two to three times what they paid last year.

However, the structure that costs us this money – our homes – could be the key to lowering our bills and even making some money in the process.

The government has in recent months drawn up a scheme to allow homeowners to sell excess energy generated by solar panels or other means to the grid.

What is involved?

The government’s Climate Action Plan sets a target of 2.5 gigawatts (gigawatts) of energy coming from solar energy by 2030.

It is hoped that the Microgeneration Support System (MSS) will contribute about 380 megawatts (megawatts) to this, which is roughly equivalent to more than one million solar panels in about 70,000 buildings.

The legislation enabling the scheme was signed into law in February before going into effect in July.

Under the MSS, homeowners can receive a payment for each kilowatt-hour of additional energy they generate and sell it back to the grid.

And the payments can be retroactive to mid-February, or when the junior programmer becomes eligible for the plan if after that.

Many suppliers have not yet started payments, although they have promised to start by August, but the payment process is expected to begin soon.

So, how many families generate their own energy?

According to a study by Union Carbide Corporation’s MaREI Center, about 24,000 homes have already begun to switch to solar power.

The study concluded that as many as one million homes in Ireland could realistically switch to solar power by 2030, well above the government’s goal of having 250,000 new rooftop solar systems installed by that date.

They calculated using the total number of homes with sufficient roof area for ten solar panels and with appropriate guidance excluding vacant properties and apartments other than those on the upper floors of the compounds.

The report concludes that this equates to enough energy to power one in four Irish homes, achieving about 8% of our renewable energy targets while eliminating an estimated 135,000 tons of greenhouse gas emissions.

How much does it cost to install solar panels?

There are many variables including the size of the house, the number of panels it can accommodate and how much energy you want to generate with your solar panels, but a standard installation of about 6 panels is estimated to be around €5,000.

A grant of up to a maximum of €2,400 (depending on the size of the system and the amount of energy it generates) is available from the Sustainable Energy Authority in Ireland reducing expenditures to around €3,000 for a standard project.

The benefit of a typical household is that it produces up to 40% of a household’s annual electricity needs which would offset between €400 and €450 a year – and even more in the current pricing climate.

“If you offset about €400 on your electricity, the return will be somewhere between 7 and 10 years,” estimates Paul Dean, a senior research fellow in Clean Energy Future Contracts at UCC’s MaREI.

“It’s a relatively decent return because after the system pays for it, you produce free or low-cost energy over the next 20 years or so,” he added.

This return can be significantly accelerated if energy costs remain at their current level.

If I am not covering the full power use of the property, how can I generate excess power to the grid?

Solar power generation operates on a “use it or lose it” basis.

So, a lot of it actually ends up back on the net, basically for free.

This new system will essentially reward the homeowner for this contribution to the country’s electricity production.

Some homeowners will have a transformer installed that will direct some of the excess power to generate hot water, for example.

It can also be sent to the battery store which will store some energy as surplus.

However, the more energy that is kept in the home, the less it returns to the grid that the homeowner can be rewarded for.

Again, given current energy costs, keeping as much energy as possible in the home is likely best.

The government recently canceled a €600 grant for battery storage in anticipation of introducing the MSS that would reward homeowners for their energy contribution.

How much can I get from generating electricity to the grid?

Participating energy suppliers plan to pay different amounts, but some are more generous than others, so far ranging from 13.5 percent per kilowatt-hour to as much as 20 cents.

There are a lot of variables that govern what small generators can sell back to the grid including the size of the house, the number and size of solar panels in the property, and the amount of energy they can produce and use.

500 excess units at a rate of 13.5 per cent, for example, can amount to €67.50 while 1,000 excess units at a rate of 20 per cent can be worth up to €200. The larger system, capable of exporting 1,500 surplus units at a rate of 20 percent, would be worth 300 euros.

The first €200 is tax-free but anything over that will be taxed as earnings.

It’s not a ransom by any means, but when the house is already on its way to becoming largely energy self-sufficient, it will make a good contribution to the rest of the property’s energy costs.

Aside from the cost benefit, they will collectively contribute significantly to achieving the country’s goals for renewable energy and carbon reduction.

Will the grants be there for the long-term, or should I do it ASAP?

Given the rate at which energy costs are increasing, it can be a smart home investment right now, especially if excess cash is available.

“Every kilowatt-hour that you don’t need to buy is a saving,” Pat Smith, president of the Consortium for Precision Renewable Energy, noted.

“If you put in solar PV, it will be the only investment in your home that will give you an annual payment for any excess payments to the grid, which will reduce your energy bill that goes up, and it will improve the value of your home in the context of resale value.”

He said he believed that canceling the battery grant was a regressive move that could signal further reductions in grants in the coming years as more and more people seek to install the technology.

He argued that grants should increase in value as the cost of installing solar technology is steadily rising worldwide.

He also criticized the decision to end grant support for solar panel installations by companies, a move he said was “meaningless”.

“They will benefit from the feeding tariff, but they are denied grants and support for the adoption of micro-generation in the future,” he explained.

Pat Smith argued, “We have hundreds of companies that are under tremendous pressure. The government should make grants accessible to all companies in an effort to get them to generate renewable energy.”

He added that micro-generation of solar energy is a “quick fix” and can be implemented very quickly.

“Offshore winds may take 5 or 6 years down the road,” he noted.

Solar power is also relatively low maintenance compared to wind generation as there are no moving parts and the output is considered to be expected.

While we don’t live in the warmest or brightest climates, despite beliefs to the contrary, we get quite a bit of natural light in this country.

In addition to harnessing it for our own household energy needs, we will soon be able to make a small income from it.