Will Allowing People to Sell Electricity Back to the Grid Tempt More to Install Solar Panels on Their Houses?

Green Party Councillor Michael Pidgeon got solar panels installed in June, which, he says, have created more than enough electricity to run his home since.

His is an unusual situation, though. His house has an old electricity metre that can go backwards as well as forwards, he says.

That quirk means he hasn’t paid for electricity since the panels started working, just the standing charges.

Pidgeon is waiting for the ESB to swing by and install a modern smart meter, but that his old meter ticks backwards shows how much electricity the solar panels create, he says. “It’s incredible. I’ve been telling everyone about this.”

Once the smart meter is installed, Pidgeon will lose some of the benefits though.

Householders who have solar panels create surplus electricity during sunny summer days or if they are out a lot, but while the excess goes back into the grid, the vast majority don’t currently get any credit for it.

A scheme, plans for which are in train, may change that though, and could encourage more people (who are able) to invest in solar panels.

Why Do It?

In August, Stephanie Dickenson got four solar panels installed on the roof of her small cottage in Stoneybatter.

She’s one of around 23,000 consumers of electricity nationwide who are also creating renewable energy for themselves and sometimes discharging an excess of power into the grid, according to Commission for Regulation of Utilities figures.

Dickenson is interested in the environment and so delighted, she says, to be greening her electricity use.

Homes account for a quarter of Ireland’s overall energy use and 10 percent of its greenhouse gas emissions, the Department of Climate has said.

Dickenson was surprised at how quick and easy it was to get panels fitted, taking just a couple of hours, she says. “Solar is a very neat job.”

People ask how much it costs but each house is different, she says. “It’s a bit like paying a huge whack of your electricity bill years in advance.”

Pidgeon, the Green Party councillor, paid around €8,100 for seven panels but got €1,800 back from a grant, he says. Over time, he is starting to make back the rest by not having to buy electricity, he says.

It might take seven to ten years to pay back his investment, says Pidgeon, but then there are another 25 years left in the panels so that saves a lot of money over time.

The panels seem to be creating enough power, even at the close of October as the weather darkens, to run the house, he says. “It’s far cheaper than any other fuel source now. Never mind carbon savings.”

Dickenson says that another benefit too could help encourage others to get panels though: the scheme for householders to sell their excess electricity back to the grid.

She says: “I’d love to see us all make more use of this energy source.”

Most private householders who decide to get solar panels installed are fairly environmentally conscious but they are also hoping to save money, says Conor O’Brien, a director of A1 Energy Solutions, based in Inchicore.

“The primary motivation is still financial,” he says, so more people would stump up for the panels if they could get paid for excess electricity they pump into the grid.

Most householders who have solar panels are losing a lot of their electricity to the grid, he says, as they are often out at work during the day while the sun hits their panels. “People are not getting any sort of reward for it.”

Louise Fitzgerald, a geography lecturer at Maynooth University, says that schemes that encourage microgeneration are really important in supporting the transition towards renewable energy.

They were “the central mechanism that drove the success of the German energy transition”, she says, where microgeneration schemes were introduced around 2000.

A fixed tariff scheme that ran for 20 years there allowed householders to borrow to install solar panels, and community groups to come together to build small windfarms, she says. They had the certainty that they would have an income to pay off loans.

“People become able to produce their energy and participate in the renewable energy transition, which is huge for acceptance,” she says.

“We are having trouble, I think, with acceptance of the way we are approaching the renewable transition in Ireland and something like a properly designed support for microgeneration would be particularly useful,” she says.

Some groups, like farmers, face a lot of challenges and costs, she says. “In Germany, microgeneration was a huge win for farmers.”

Enough to Encourage?

It’s been down to the Commission for Regulation of Utilities (CRU) to work out how to make sure people are paid for the extra energy at a rate reflective of market value, also known as a “clean export guarantee”.

Earlier this month, the CRU said in a consultation paper that the price, at least for the time being, should be determined by the market. After a year, the CRU will see if changes are needed, said a spokesperson.

A spokesperson for the Department of the Environment Climate and Communications says a decision on this clean export guarantee tariff “is expected in November”.

That’s just one of two payment schemes, though. “A compensation scheme is expected to follow shortly afterwards,” they said.

That may involve a “premium tariff” paid to those looking to put in new installations, as opposed to those who already have them.

Combined with the market-rate payment, “the premium tariff is intended to bridge the viability gap for the costs of the new installation”, said the spokesperson.

The CRU had looked at setting a floor tariff for those selling back to the grid, says its consultation report. But that “would not be consistent with the principles of liberalisation and deregulation”, says the report.

So for that reason, to allow for competition, it has opted to let each energy company set its own export tariff as long as it is more than zero cents per hour, says the CRU report.

In the UK, energy companies are also responsible for setting their own tariffs for buying back renewable energy. Any energy company with more than 150,000 customers has to offer a tariff.

How much may those looking to sell to the grid get? A spokesperson for Electric Ireland said that it paid 9 cents/kWh for energy sold back to them by customers who signed up to a pilot microgeneration scheme that it launched in 2009, although it stopped accepting new customers to it in 2014.

Energia already has a grid plan, under which it pays consumers who generate solar power and install a particular smart battery, 7.4 cents/kWh in bill credit if they have any excess to sell back to the grid, its website says.

For comparison, Energia is now advertising charging consumers 18.82 cents/kWh for electricity.

It’s unclear how much any premium tariff will be. “Considerations around the introduction of support schemes, including a premium tariff, are a matter for Government,” says the CRU report.

Whatever scheme is put in place, the CRU report says it will review the arrangements once it has a year of data, and consider whether measures need to be put in place to ensure that remuneration reflects the market value, as is required by an EU directive on the promotion of the use of energy from renewable sources.

“This may include obliging suppliers to offer a tariff which must exceed a floor price, as may be determined by the CRU, if warranted,” says the report.