We want to take this opportunity to reflect on the forthcoming introduction of a 0% VAT rate on solar and what that means for customers, installers and all of those interested in solar panel installations in 2023. Firstly, we believe that this is a significant step in the right direction for the solar industry, and it will undoubtedly provide a much-welcomed boost to the adoption of solar energy across the country. Especially at this crucial juncture, with our collective efforts as a nation to meet ambitious solar targets. Targets outlined as part of the most recent Climate Action Plan published by this government.
However, there are some very practical concerns for all stakeholders in the Irish solar industry. As Ireland’s largest solar installer, we feel it is imperative that we take this opportunity to address these concerns for all involved. Primarily, we are concerned that the announcement of this new policy will result in a delay in the installation of solar panels for many of our customers. They have been placed in a precarious position of being punished for their progressive action in proceeding with the installation of solar panels. And who can blame them for their current hesitation in proceeding with installation when they can foresee the introduction of 0% VAT. As we understand it, the implementation of the 0% VAT rate on solar may take up to three months, and this delay will force our customers to postpone their installations until the policy is rolled out. As we have explained to many of our customers already, this is our current understanding.
This delay will have a significant impact on our business and our workforce. As a company with more than 180 staff, the inability to complete work will leave many of them idle. Having worked extremely hard to increase our capacity over the last six months to meet increased demand across the country and help deliver the governments ambitious solar installation targets, this situation is very disappointing and will be financially challenging for our company and our employees, and it will set back the progress of the solar industry in the short-term.
We would urge the government to consider the impact of this delay on all stakeholders and take steps to minimise its impact. We would be happy to work with the government to show where implementation of this new policy could be as smooth and efficient as possible, and that the installation of solar panels can continue without interruption. As we look towards the targets set out in the Climate Action Plan, we are all aware of how important weeks and months are in putting our best foot forward and delivering on these solar targets. There are a number of VAT rebate strategies that have been used by this government in the past to help deliver government programmes. In particular, the old HRI (Home Renovation Incentive) VAT Rebate scheme is one that stands out as a practical solution for short-term implementation, whereby the customer can rebate the VAT on installations between today and the rollout of the new 0% VAT rate. Even a simple announcement of assurance that such an interim measure would be set in place would help the solar industry at a residential level and prevent it from grinding to a halt for the next number of months.
Ciaran Marron, CEO of Activ8 Solar Energies
To our customers. We are doing everything we can to make representations on your behalf and express the real concerns that you have had since hearing this news. We all know this is a progressive step for the future of solar energy in Ireland, but it would be remiss of us not to make representations on your behalf to find a short-term solution to a short-term problem. We have navigated such changes in the past and endeavour to do the same again.
Statement last updated: 09:45, 4th April, 2023.