James Bannon (Longford-Westmeath, Fine Gael)
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Question 1511: To ask the Minister for Communications, Energy and Natural Resources the plans he has to make changes to the VAT rate on wind turbine equipment, which is 21% here as opposed to 5% in the UK; his views on grants for the installation of such energy efficient measures; if there are proposals for the ESB to purchase surplus energy generated; and if he will make a statement on the matter. [29603/08]

Eamon Ryan (Dublin South, Green Party)
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The matter of VAT rates is a matter for my colleague the Minister for Finance. The VAT treatment of goods and services is governed by EU law with which Irish VAT law must comply. While we can retain the zero rating provisions which were in existence on 1 January 1991, we cannot introduce any new ones. Therefore, it is not possible to apply a zero rate to the supply of wind turbine equipment.

The supply of certain environmental products, such as wind turbine equipment, wood pellet boilers and solar panels, are chargeable at the standard VAT rate of 21%. However, the reduced VAT rate of 13.5% may be applied to such products where they are provided under a single supply and install contract where the VAT exclusive cost of the goods does not exceed two-thirds of the total VAT exclusive charge to the customer.

Grant support measures are available in the heat market for micro scale products through the Greener Homes scheme for domestic level and ReHeat and CHP programmes for the small business and non commercial sectors. These schemes are run by Sustainable Energy Ireland (SEI).

In April this year, I announced a micro scale programme that is being developed by SEI for the electricity market. This programme, which will resolve outstanding technical issues in this area around qualifying technologies and defining arrangements for qualification, certification and training of installers in connecting these technologies to the electricity network. These measures need to be addressed to ensure system stability including the safety of network staff and consumers using the micro scale technologies. The field trial element of this programme will be launched by SEI within the next few weeks. I have also asked my Department to engage with the Commission for Energy Regulation and all relevant parties in relation to determining appropriate options for the purchase of surplus energy.

New Building Regulations

Revised building regulations brought into force in July of this year now include a compulsory renewable energy component on renewable energy in all new homes. This will not only ensure that renewables are integrated into homes but will also encourage individuals to consider a range of renewable options when purchasing a new home. This is further underpinned by the introduction of the Building Energy Rating which provides information to house purchasers on energy performance and to which any use of renewables will contribute.