Cost of installing solar panels to drop by €1,000 under planned VAT cut

The Government is set to sign off on a plan to abolish VAT on the supply and installation of solar panels in homes. The plan, devised by Green Party leader Eamon Ryan, would result in a saving of about €1,000 on the cost of installing solar panels on the average home.

When combined with the existing SEAI (Sustainable Energy Authority of Ireland) grant of up to €2,400 for home solar installations, it would mean the cost of solar panels could drop to €5,600 on an average home.

The move is being taken as the Government aims to make it cheaper for people to generate their own electricity. Mr Ryan will tell Ministers that the scrapping of VAT will mean the solar panels will “pay for themselves” in six years after which they could produce “free electricity” for another 20 years.

The measure will form part of the Finance Bill which will come before Cabinet this week. It follows moves to scrap planning permission requirements to install solar panels on residential homes, while a microgeneration scheme allows households to sell their excess renewable energy back to the grid.

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The Green Party leader has also announced plans to put solar panels on every school in the country. Ministers last year discussed a proposal to put photovoltaic panels on all schools in a bid to help protect them against rising energy prices into the future.

Last year at the Green Party’s annual conference, Mr Ryan also said the Government would bring forward solar power targets by five years, promising to reach the target 5,000MW of capacity by 2025 instead of the existing target of 2030.

“What that means is that by 2025 there will be sunny afternoons when we are generating enough solar electricity to power the entire country,” Mr Ryan said.