Irish Solar's Time to Shine

Having previously played a secondary role to onshore wind, in Ireland’s efforts to decarbonise and secure its electricity supply for much of the past decade, solar PV is now coming of age in its role to meet our 2030 EU targets. With this in mind, the solar sector is the focus in the latest of our white paper publications from Davy Decarbonization Corporate Finance, entitled ‘Irish Solar’s Time to Shine, which you can download from the link on this page.

Alongside the paper, Dr. Fergal McNamara, Senior Policy Director, further discussed his whitepaper and the opportunities in the Irish solar market at a recent webinar, available to watch on this page.

Key takeaways:

• Solar as a renewable resource will play a major role and provide a key contribution in the energy transition. It currently has a global share of 2% of electricity production, but the growth in solar investment globally has been exceptional with 151 GW added in 2021, according to the International Energy Agency.  Costs have plummeted by some 85% towards a levelized cost of US$30-40/MWh.
• The EU has set a target for solar of 600 GW by 2030 (up from 224 GW installed in 2022), which will require annual investment of 45 GW – a significant step-up from the current rate of 26 GW/year. Solar is predicted to be the predominant source of electricity from c.2040 onwards.
• A series of planning reforms are in train in Ireland that will be of assistance to investors in energy projects.  In the solar sector, planning exemptions for rooftop solar installations are already in place; this bodes well for growth.
• In the National Climate and Energy Plan, Ireland has pledged an overall 2030 national renewables share of 34.1% of total energy consumption. In the electricity sector, an overall target of 80% has been set – which includes an 8 GW target for solar, i.e. the Total Addressable Market. From this, Davy estimates the remaining Serviceable Available Market for commercial development at  3-4 GW, requiring investment of €3.75-4.5 billion.
• Davy views three practical routes-to-market for solar: government supports, commercial and grants.  Government supports are allocated by means of public auctions.  Two auctions have taken place to date and a third is planned for 2023.  Davy foresees that solar will be the predominant competing technology in this auction.
• The solar market in Ireland is currently fragmented and mainly a domestic play. Projects to date are small, albeit increasing in size, with market consolidation expected in time.