Sunrise: Economic impacts of the solar energy industry in Ireland

KPMG was engaged by the Irish Solar Energy Association to assess the economic impacts of the solar energy industry in Ireland. Solar energy is now a significant contributor to Ireland's energy supply, providing renewable electricity to our homes, businesses and the national grid.

The deployment of solar capacity in recently years is driven not only by Ireland's Climate Action Plan target of 8 GW of capacity by 2030, but also a result of the significant and sustained reduction in the cost of solar panels and the benefits to customer of onsite generation.

The sector has become a significant source of employment throughout the country, providing monetary benefits to a wide range of stakeholders including community schemes, local authorities and the Exchequer. Many solar energy projects have also delivered biodiversity and conservation benefits which are showcased in some of the case studies included in the report.

Our analysis finds that if national targets are met, the sector will contribute over €2.3 billion in additional Gross Value Added (GVA) to the Irish economy between 2025 and 2030, while supporting up to 7,130 jobs across the country. This represents a significant contribution to the Irish economy, alongside the environmental benefits.

We hope that this report proves useful and informative to industry stakeholders, policymakers and other parties interested in the solar energy industry in Ireland.

Increasing solar capacity is driven by the Climate Action Plan’s target to generate 80% of electricity from wind and solar power by 2030. This report assesses the economic benefits of the solar energy industry, finding that if these targets are met, the sector will contribute over €2.3 billion in Gross Value Added (GVA) to the Irish economy between 2025 and 2030.

James Delahunt

Partner, Corporate Finance, Head of Energy & Natural Resources

KPMG in Ireland

Key findings

Gross Value Add (GVA), employment and incomes impacts

Gross Value Add (GVA), 2024 and 2030

Through its operating and capital activities, the solar industry makes a valuable contribution to Ireland’s economy. The industry’s baseline GVA is estimated to be in the range of approximately €437m - €514m in 2024, with a large proportion of this GVA, €430m - €505m arising from the industry’s capital activities and a modest proportion, approximately €7.3m – €8.6m of the total GVA arising from the industry’s operational activities. Direct GVA is estimated to be in the region of €335m - €394m with indirect GVA is estimated to be €102m - €120m in 2024. This level of GVA reflects an aggregate multiplier on investment across operational and capital activities of 1.31.(Multiplier impact refers to the ripple effect)
Achieving Ireland’s solar PV capacity target of 8 GW by 2030 is expected to deliver GVA of approximately €480m - €565m in that year across all operational and capital activities, reflecting a strong contribution to the Irish economy.
Solar energy can make a vital contribution to Ireland’s economic performance over the coming years arising from direct and indirect benefits. The industry has a strong pipeline of development projects in planning, granted planning, and commencing construction as of mid-2024. The delta between the GVA and economic output points to an opportunity to develop additional elements of the value chain in Ireland, such as the increased participation in the manufacturing supply chain for subcomponents or ancillary equipment. If the national target of 8 GW by 2030 is reached, total GVA arising from capital investments and operational activities could be in the range of €2.3bn - €2.7bn during the period 2025-2030.

Community benefit funds, tax and commercial rates contributions

Tax contributions benefits

The distribution of solar installers and solar farms across the country, leads to significant investment, economic activity, and employment benefits outside of Ireland’s major urban centres. Investment in local infrastructure related to solar energy can complement other rural economic growth initiatives and act as the basis to support long-term economic growth throughout the country.
In 2024, solar energy is estimated to generate up to €63m of employment related taxes for the Exchequer. Total payments through employer taxes are estimated to be in the range of €25m - €30m with employee taxes of approximately €28m - €33m.
The accumulated returns to the Exchequer through employee and employer PRSI, income tax and USC is estimated to reach up to €344m over the period 2025-2030.

Community benefit fund and commercial rates

The industry provides an important and stable source of revenue for many local authorities, with total contributions estimated to be in the region of €4.3m - €5.4m in 2024. Solar energy companies provide local authorities with valuable revenue that can be reinvested into local communities, infrastructure and services. As the industry’s scale grows over the coming years the financial contribution to local authorities has the potential to reach €51m per annum by 2030.
RESS supported solar farms are expected to contribute up to €1.6m into Community Benefit Funds in 2024, this has the potential to increase to €15m per annum by 2030. Voluntary contributions from solar farms contracted to large energy users through bilateral corporate power purchase agreements (cPPAs) have the potential to increase further community benefit funding however little data is currently available on such contributions.
Together, commercial rates and Community Benefit Fund payments could contribute €56m - €65m of investment into local communities and amenities in 2030.

Employment and incomes, 2024 and 2030

Ireland’s solar energy industry supports a wide variety of jobs, both directly and indirectly, through its capital activities. The types of local employment supported includes project management, construction, and a range of infrastructure delivery roles. Employment in Ireland’s professional services sector including legal and financial services is also strongly supported.
Capital investment expenditure should not be seen as a once-off event, rather the need for additional renewable generation capacity means capital investment will take place on an ongoing basis. Delivering the target of 8 GW by 2030 will require a sustained deployment of approximately 1 GW to 1.3 GW per annum resulting in the number of total direct and indirect jobs supported growing from approximately 6,440 in 2024 up to approximately 7,130 in 2030, representing approximately 11% increase on the baseline number of jobs supported.
Solar energy is estimated to currently support between approximately 5,480 - 6,440 jobs distributed across the country. This number comprises of 4,270 – 5,000 directly supported jobs and 1,210 – 1,440 indirectly supported. Much of the employment supported is located outside of the Dublin region, often near or within the rural communities that host utility-scale solar farms. Installer jobs in particular are distributed throughout the country.
The contribution to Ireland’s labour incomes is currently estimated to be in the region of €230m - €270m, these payments of labour incomes has the potential to increase by 12% to between €258m - €304m by 2030 if national solar PV targets are achieved.
Over the period 2025-2030 the number of jobs supported by the growth in solar energy is estimated to be in the range of 5,480 - 7,130. As the majority of jobs are generated as a result of capital activities, the number of jobs supported will move in line with the level of capacity development in any particular year.
Total payments to labour in the Irish economy could reach up to €1.4bn over the period 2025 - 2030.