Independent TD, Richard O’Donoghue, has slammed the government for “penalising Irish people with a crippling carbon tax” before introducing energy alternatives.
The deputy expressed his frustration during a Dáil debate on offshore renewable energy on Wednesday, December 8th, 2021.
He believes offshore renewable energy “has the answer” and added that all the power generated at sea would be a resource for the economy.
He made particular reference to the agricultural sector, stating, “the government is saying it is incentivising farmers, but on the other hand, it is taking back the incentive”.
The deputy believes the government is “trying to cripple” the farming community.
O’Donoghue told the Dáil about a 130-cow dairy farmer who recently installed solar panels.
“Last week, a farmer with 130 average size cows who pays €850/month for electricity installed solar panels to run his farm on solar power and reduce emissions.”
“The cost of the solar panels was €21,500. He got a grant of €3,000 and then had to pay 13.5% VAT on installation.”
“How long will it take for him to recoup the initial cost of €21,500? Surely, there is supposed to be an incentive for farmers to install solar power.”
The deputy then provided a breakdown of the costs involved.
“The solar panels cost €21,500. The government gave a grant of €3,000 and then asked the farmer to pay 13.5% VAT for their installation, at the cost of €2,497.50, bringing the cost involved to €20,997.50.”
“This means the government gave the farmer a grant of €502.50, not €3,000. We are supposed to be incentivising farmers to help us in this area,” he added.
The deputy said the Rural Independent Group welcome renewable energy but said, “all the government has done is create a layer of tax that means nobody in this country can invest in solar panels”.
“Its answer to the current fuel crisis was to add tax through the percentage system it uses, he argued.
Reduce VAT rates on solar PV panels
Meanwhile, earlier this week, the Micro-Renewable Energy Federation called on the government to immediately implement an agreement EU Finance Ministers reached this week to reduce VAT rates on solar PV panels and other equipment installed in private homes and public buildings.
MREF chairman, Pat Smith, said that, under new EU rules, member states now have the scope to apply reduced VAT rates as low as 5% on solar PV equipment.
He said this would be a “major” reduction in the VAT rate of 13.5% that applies to solar PV installations on homes.