Irish Budget: Solar Panels To Qualify As Agricultural Activity


Leasing of agricultural land for solar panels will be deemed a qualifying agricultural activity, Irish Minister for Finance, Paschal Donohoe has announced. The move will make the land eligible for Capital Acquisitions Tax (CAT) and Capital Gains Tax (CGT) relief, the minister told the Dáil. This will be subject to solar panels not covering more than 50% of the total farm holding. The move, he said, would encourage farm diversification and renewable energy.

The Irish Solar Energy Association (ISEA) has welcomed the announcement in Budget 2018 of tax relief for farmers who lease land for solar infrastructure. CEO of the ISEA, Michael McCarthy, has said the new measure will help to develop a native and viable solar industry in Ireland by incentivising farmers to make more land available for solar projects. He said:

"The Irish Solar Energy Association warmly welcomes confirmation from the Minister for Finance Paschal Donohoe today that agricultural land leased for solar panels will now be classified as an agricultural activity, provided that the amount of farmland used for solar is limited to 50% of total acreage.

"This is an extremely positive policy initiative which will encourage greater diversification of land use, help expand Ireland's portfolio of renewables, and assist in the fight against climate change.

"Providing farmers and landowners with incentives to release land for solar projects was specifically proposed by the ISEA when we met with the Minister and officials from his Department earlier this year. We are hugely encouraged that the Minister and the Department have taken on board our cogent case.

"Prior to this measure being introduced, once land was leased for solar infrastructure it was no longer deemed as agricultural, which acted as a major stumbling block to farmers positively disposed towards large-scale ground-mounted solar developments. This measure removes that block, enabling farmers who lease land for solar projects to qualify for Capital Acquisitions Tax and Capital Gains Tax. It will also help arrest the decline in farm incomes and provide farmers with a degree of assurance and security at a time when volatile global environment threatens to undermine their livelihoods.

"This key policy initiative will contribute to the development of a broader policy framework that is required to underpin a strong native environment for the solar industry. It signals strengthening Government support for the solar sector and also highlights a recognition of the vital role that solar can play in reviving the rural economy.

"In this context, I want to credit the Department of Finance and Minister Donohoe in particular for their foresight in bringing this progressive measure to fruition today. It also comes on the heels of the Renewable Energy Support Scheme (RESS) consultation which was announced last month by Minister for Climate Change Denis Naughten.

"The ISEA are now calling on the Government to engage in further positive strategic thinking in its approach to solar to help unlock the enormous potential that lies within the industry. Accelerated deployment of solar panels "“ which we expect to be an effect of today's new policy measure "“ will generate jobs, particularly in the construction and installation sectors, and help attract more investment from high-tech, exporting industries."

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