Catherine Murphy (Kildare North, Social Democrats)
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291. To ask the Minister for Communications, Energy and Natural Resources his plans to invest in the solar energy sector; if consideration was given to this sector in the context of our 2020 obligations; if a cost benefit analysis was carried out; if energy substitution for this sector formed part of the consideration; why it is the only renewable energy that does not qualify for a State subsidy; and if he will make a statement on the matter. [17899/16]

Denis Naughten (Roscommon-Galway, Independent)
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The Programme for Government contains a commitment to facilitate the development of solar energy projects. This commitment builds on the Energy White Paper published in December 2015 and recognises that solar photo voltaic (PV) also has the potential to provide a community dividend, thereby enhancing citizen participation in Ireland's energy future.

It is widely recognised that solar photo voltaic (PV) technology has become more cost competitive for electricity generation over the last few years, not only compared with other renewables but also compared with conventional forms of generation. With these significant changes in the cost of the technology, the deployment of solar PV in Ireland has only recently become a potential cost-effective option to increase energy security, to contribute to our renewable energy targets and to support economic growth and jobs. It is also recognised however, that while the cost competitiveness of solar PV has improved, it would still require a subsidy in order to be developed on a commercial basis.

Work is now on-going to examine the design and cost of introducing a new Renewable Electricity Support Scheme (RESS) to encourage the development of Ireland’s abundant and indigenous renewable energy resources. This scheme will examine the economic viability of supporting a range of new renewable energy technologies in Ireland - including solar - and will help to further reduce energy-related emissions.  While the scheme is not purposely designed to meet our 2020 obligations it is likely to make some contribution to those targets.

The primary support mechanisms for renewable electricity are the REFIT (Renewable Energy Feed-in Tariff) schemes. While the REFIT schemes are now closed to new applications, the schemes cover a range of technologies, including wind energy, biomass technologies and landfill gas. The REFIT schemes have proven very successful at incentivising the increase in the use of renewable energy in Ireland. A report published by the Council for European Energy Regulators found Ireland to have one of the lowest levels of monetary support per unit of gross electricity produced and maintaining this value for money for end consumers will be an important element of any new Renewable Electricity Support Scheme.

While the inherent benefits of an increased use of renewable energy in Ireland are apparent in terms of displacement of fossil fuels, consequent emissions reductions, increased security of supply and reducing the potential impact of fossil fuel price volatility, it is equally important to understand the potential cost of this transition.

Quantifying this cost is a complex task due to the number of influencing components. For example, while renewable electricity generation introduces savings by reducing the need to burn fossil fuels, this is offset to a certain extent by increased costs of system operation, the need for additional network investment and the capital and operational costs of the renewable generators. In the past a number of studies have been completed by various parties in the energy sector focusing on particular aspects of this issue. However, a broad based analysis is being finalised by my Department, the SEAI, Eirgrid and the CER, which looks at the range of components contributing to the projected costs and the financial impact on the electricity customer. The report will be published this year once the work has been completed.