Ireland has set a target to achieve 70% renewable energy by 2030, and solar power should play a significant role in achieving this target. As the demand for solar energy increases, more investors are turning towards solar farms as a lucrative investment opportunity. One of the most significant factors that make solar farms an attractive investment option is the potential income they can generate. You canget a solar project quote here to understand the costs.
This blog post will explore the details of solar farm income per acre in Ireland, including statistics and information from government sites.
Overview of Solar Farm Income in Ireland
Solar farms in Ireland generate income from selling renewable electricity to the national grid and receiving government subsidies. Typically, solar PV systems sell electricity to the national grid at a wholesale price of 5-6 cents per kWh, but the rate can vary depending on the season, time of day, and other factors.
The Renewable Electricity Support Scheme (RESS) is the primary government subsidy available for solar farms in Ireland. The RESS offers a guaranteed payment for every unit of renewable electricity generated, and the current tariff for solar farms is 6.9 cents per kWh for the first 16 years of operation.
Developing a solar farm in Ireland requires obtaining planning permission from the local authority and a grid connection from EirGrid, which manages the national grid. Income generated from a solar farm can vary depending on factors like solar irradiance, panel efficiency, and land costs. According to reports, the average revenue generated by a solar farm in Ireland is €1,000-€1,500 per acre per year, potentially earning up to €2,000 per acre per year.
The Irish government has implemented policies like the RESS and Accelerated Capital Allowance scheme to encourage investment in renewable energy projects, including solar farms. With the government’s target of achieving 70% renewable energy by 2030, solar farms in Ireland remain a promising investment opportunity.
Factors Affecting Solar Farm Income per Acre in Ireland
Several factors can impact a solar farm’s income per acre in Ireland. Some of these factors are:
Solar Irradiance
Solar irradiance refers to the solar energy that reaches the earth’s surface. In Ireland, solar irradiance is lower than in other countries, resulting in lower electricity generation per acre for solar projects. However, the progress in solar panel technology has increased their efficiency, meaning solar farms can generate more electricity per panel than in the past.
This technological advancement allows solar farms to generate more power even if they occupy less land. As a result, solar leases have become a popular option for landowners, allowing them to generate income from their land without the need for upfront investment.
Land Costs
Land cost is a crucial factor impacting the income generated by solar projects per acre in Ireland. The prices vary based on several factors, like the size of the solar project, location, and others. Leasing the land instead of buying it can help reduce upfront costs, making solar projects more affordable.
The Targeted Agricultural Modernisation Scheme (TAMS) provides grants for farmers to help finance the installation of renewable energy systems, including solar panels. Additionally, leased land can help farmers generate income through the Basic Payment Scheme (BPS) without losing land ownership.
Panel Efficiency
The efficiency of solar panels is a crucial factor that affects the income generated by a solar farm per acre in Ireland. This is because highly efficient panels produce more electricity per panel, reducing the number of panels required to generate the same amount.
Maximizing panel efficiency is essential for solar installations on limited roof space. High-efficiency panels also generate more electricity from the same amount of sunlight, providing more electricity for consumption. Therefore, investing in highly efficient solar panels is a crucial consideration for solar farms, as it can result in higher income per acre in Ireland.
Operational Costs
The operational costs of a solar farm are an important consideration that can affect the income generated per acre in Ireland. These costs include land lease agreements, maintenance, insurance, and other expenses. In addition, electricity consumed by the solar farm itself can add to the operational costs.
Careful management of operational expenses is critical to maximizing the income generated by a solar farm per acre in Ireland. Solar farm operators must consider various factors such as efficient maintenance and operations management, choosing a cost-effective lease agreement, and optimizing electricity consumption to minimize these costs.
Statistics on Solar Farm Income per Acre in Ireland
According to a report published by the Sustainable Energy Authority of Ireland (SEAI) in 2018, the average income generated by a solar farm in Ireland is €1,000-€1,500 per acre per year. This figure includes revenue generated from the sale of electricity and subsidies from the REFIT scheme. The report also states that solar farms in Ireland have the potential to cause up to €2,000 per acre per year in ideal conditions.
The SEAI report also provides data on the average cost of constructing a solar farm in Ireland. According to the report, the average price of creating a solar farm in Ireland is €1.2-€1.5 million per megawatt (MW) of installed capacity. This cost includes the cost of solar panels, inverters, transformers, and other equipment.
Another report published by the Irish Solar Energy Association (ISEA) in 2020 provides data on the potential income a solar farm in Ireland can generate. According to the ISEA report, a 5 MW solar farm located in the Midlands region of Ireland can generate an annual income of €602,400 from the sale of electricity and €905,400 from the REFIT scheme in a total yearly income of €1,507,800. It equates to a payment of €301,560 per acre per year.
It is important to note that the figures provided by the SEAI and ISEA reports result from assumptions and ideal conditions. The income generated by a solar farm can vary depending on several factors, such as solar irradiance, land costs, panel efficiency, and operational costs.
Government Support for Solar Farms in Ireland
The Irish government has generally supported solar farms and renewable energy. The government has set a 70% renewable energy target by 2030 and has implemented several policies and initiatives to support renewable energy development.
The REFIT scheme is one such initiative that provides a guaranteed payment for every unit of electricity generated by renewable energy sources such as solar energy. The scheme has been instrumental in incentivizing investment in renewable energy projects, including solar farms.
In addition to the REFIT scheme, the government has also introduced tax incentives for renewable energy projects. For example, the Accelerated Capital Allowance (ACA) scheme allows businesses to write off the entire cost of qualifying renewable energy equipment against their taxable income in the year of purchase. This scheme has benefited companies investing in renewable energy projects, including solar farms.
Conclusion
Solar farms in Ireland have the potential to generate significant income, primarily from the sale of electricity and subsidies from the REFIT scheme. However, the revenue generated by a solar farm per acre can vary depending on several factors, such as solar irradiance, land costs, panel efficiency, and operational costs.
According to reports published by the SEAI and ISEA, the average income generated by a solar farm in Ireland is €1,000-€1,500 per acre per year, potentially generating up to €2,000 per acre per year in ideal conditions. However, conducting a thorough feasibility study before investing in a solar farm is essential to assess the potential income and costs associated with the project.
The Irish government’s support for renewable energy and policies like the REFIT and ACA schemes has incentivized investment in renewable energy projects, including solar farms. With the increasing demand for renewable energy and the government’s commitment to achieving 70% renewable energy by 2030, solar farms in Ireland will continue to be a lucrative investment opportunity.