Gerald Nash (Louth, Labour) | Oireachtas source

Mrs. Murphy is rarely wrong, in all of our experience. Deputy Healy-Rae is right.

The Labour Party supports the setting of a zero VAT rate on solar panels for domestic use, but the measure must not be exploited by the industry to boost its profits at the expense of the consumer. This reduction in VAT needs to be passed on to the consumer by the industry. The Government needs to be vigilant and make sure this happens. We know from recent experience in areas of the economy where the VAT rates have been reduced, at great expense to the taxpayer, but those savings have not been passed on. It was quite the opposite. The measure before the House this evening would reduce the average cost of installing solar panels on a private dwelling by around €1,000, if the VAT reduction is passed on to the consumer. That is a big "if". It would be a significant saving, particularly at a time when consumers are being fleeced by energy companies on their electricity bills and are looking all the time for alternatives.

I spoke earlier today about the rise of what we term "greedflation" in the food and grocery sector with large corporations across the European Union blaming inflation for rising prices while at the same time their bottom line, coincidentally, grows and grows. We do not have data on Irish supermarkets but we do have data on European Union and UK supermarkets. They do not, unfortunately, separate out their profit margins in the context of their Irish presence. It would be foolish not to assume those same supermarkets are profiting in the same way as their UK partners or their European Union partners.

I do not want to be standing here a month or three months after this VAT reduction is introduced asking why the industry has failed to pass on the savings to the consumer and be told that inflation has wiped out the reduction. I do not buy that. I will not buy it. I hope the Minister will not buy it either. If it is not working it should be reviewed, and reviewed at the earliest opportunity. When I say "not working", I am referring to it not working on behalf of the consumer. This is what this should be about.

Solar photovoltaic, PV, is becoming the lowest-cost option for consumers wishing to switch to renewable energy in most parts of the world but we still have work to do here in Ireland. This is a very welcome initiative we believe and hope will assist in Ireland meeting its climate action targets and goals. Our EU neighbours in the Netherlands are leading the way. They have gone from solar producing 1% of the country's electricity in 2015 to 14% in 2022. Not all of that is delivered through domestic solar panels and some 1 million Dutch consumers are using renewable energy sources delivered through local energy co-operatives, a model I believe we can all agree this country needs to look at more closely.

According to the Irish Solar Energy Association, ISEA, hitting Ireland’s 2030 solar energy targets, of which domestic solar panels are an important part, can deliver significant energy savings to consumers. Last September, the ISEA reported that 24,000 private households in Ireland had solar panels installed. The Government target for 2030 is 250,000 homes, so we are quite a distance away from that target as it stands. We all hope this important initiative, which will cost only €19 million, will assist in that goal. According to the ISEA, a typical household with 2.4 KW of solar panels could generate more than one third of its annual electricity and save around €380 a year in electricity bills, although that figure was calculated before those bills spiralled upwards so the savings now are likely to be much greater than that analysis.

Domestic solar panels are much easier to deliver - as we know - than larger solar farms with all the planning and land procurement, and the investment in community buy-in issues that arise in such larger scale projects. The only real barrier to the widespread installation of solar panels in domestic settings is cost. We have already made the decision to make the installation of domestic solar panels at least somewhat easier by removing the need for planning permission. That is to the Minister, Deputy Ryan's, credit, along with the Minister for Housing, Local Government and Heritage, Deputy O'Brien, and others. That was a very important initiative. I have spoken with many local business people in my own community who are considering introducing solar panels into their businesses. They did so very easily and very quickly because of the removal of that bureaucratic red tape. It is not that planning is ever red tape but in the context of the installation of solar panels it was one less barrier, one less obstacle, and one less expense for them in doing that. It has worked very well for those who have done it over the past period of time. Reducing the VAT to a zero rate should serve as further encouragement to the ordinary consumer and the ordinary householder to switch to the technology. It is a measure that helps the environment and potentially delivers real savings to households across the country but only if the industry plays fair and passes on these savings to their customers.

In conclusion, I will ask two questions. To repeat what Deputy Doherty asked about the installation piece, he is right that the tax strategy group papers had clearly said previously that any VAT rate reduction or zero rating could not be provided to installers. Perhaps the Minister will explain how that position has changed in a short period of time. Will the Minister also provide us with figures from his Department in the context of the research and analysis that would have been undertaken to inform this decision, including the number of households the Minister believes might benefit from this particular initiative over the next full calendar year during which this measure will be enjoyed. This would be very useful for us in considering how the Government plans to assist householders to meet that 250,000 installation target over the next few years.

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