Solar potential: Economic benefits for Northern Ireland

KPMG was engaged by the RenewableNI to assess the economic impacts of the solar energy industry in Northern Ireland (NI).

The solar energy industry in Northern Ireland (NI) experienced a significant slowdown from 2018 to 2024, with no new installation in utility solar PV. This stagnation can be attributed to reduced government incentives, market uncertainties / routes to market, which have hindered investment and expansion in the sector.

The Climate Change Act (Northern Ireland) 2022 set a target of reaching 80% renewable electricity by 2030. Along with this target the SONI Tomorrow’s Energy Scenarios (TES) 2020 report include an “accelerated ambition” scenario, indicating the need for a large increase in solar generation.

Our analysis is based on reaching 900 MW utility-scale solar PV capacity by 2030. The solar industry is expected to see significant growth in the coming years, if the target of 80% renewable electricity by 2030 is to be met.

Our analysis finds that if national targets are met, the sector will contribute over £426 million in additional Gross Value Added (GVA) to the Northern Ireland economy between 2025 and 2030, while supporting up to 1,800 jobs across the country. This represents a significant contribution to the Northern Ireland economy, alongside the environmental benefits.

If the 900 MW utility solar capacity is met the industry will contribute up to £426 million in additional Gross Value Added (GVA) to the Northern Ireland economy between 2025 and 2030.

Russell Smyth

Partner, Head of Sustainable Futures and Corporate Finance

KPMG in Ireland

Key findings

Gross Value Add (GVA), 2025 - 2030

Through its operating and capital activities, the solar industry makes a valuable contribution to NI’s economy. By 2030, the industry’s contribution to GVA could be in the range of £97m - £114m. Of this, 90% could be generated from the industry’s capital activities, with the remainder generated from its operational activities. This is equivalent to direct GVA of £69m - £81m and indirect GVA of £28m - £33m. In other words, for every £1 of direct GVA, the NI solar industry supports a further £0.41 in the wider economy.
The solar energy industry can make a vital contribution to NI’s economic performance over the coming years arising from direct and indirect impacts. The industry has a strong pipeline of development projects in planning, granted planning, and commencing construction from 2025 onwards. There is an opportunity to capture more of the value chain in NI, such as increasing the manufacturing of solar subcomponents or ancillary equipment in NI. Reaching a solar PV capacity of 900 MW by 2030 is expected to support GVA of approximately £362m - £426m over the period 2025 - 2030 across all operational and capital activities.

Employment and incomes, 2025 – 2030

The solar energy industry can make a vital contribution to NI’s economic performance over the coming years arising from direct and indirect impacts. The industry has a strong pipeline of development projects in planning, granted planning, and commencing construction from 2025 onwards. There is an opportunity to capture more of the value chain in NI, such as increasing the manufacturing of solar subcomponents or ancillary equipment in NI. Reaching a solar PV capacity of 900 MW by 2030 is expected to support GVA of approximately £362m - £426m over the period 2025 - 2030 across all operational and capital activities.
The slowdown in installation in the period 2018 - 2024 has resulted in a decrease employment across utility-scale solar in NI. Reskilling of labour in roles such as electrical engineers and welders within the solar industry will be required to reach the target of 80% renewable electricity by 2030.
The NI solar industry could support up to £206m in labour income over the period 2025 - 2030.

Tax contributions and business rates

By 2030, the solar energy industry could generate up to £15m in employment related taxes annually to HMRC. Total payments through employer taxes are estimated to be £4m - £6m with employee taxes of approximately £2m - £3m.
Over the period 2025 - 2030, the accumulated taxes through employee’s and employer’s NI and income tax is estimated to contribute up to £54m.
By 2030, the industry could contribute approximately £1.6m - £1.9m in district business rates per annum. This would provide a stable source of revenue for many of the local authorities across NI. Solar energy companies provide local authorities with valuable revenue that can be reinvested into local communities, infrastructure and services. As the solar energy industry grows in scale in NI, the financial contribution to local authorities could reach a total of £7m over the period 2025 - 2030. On a regional level, the industry could contribute up to ~£5.9m to the NI Executive over the same period.
In addition to the contribution made by the industry to the local authorities and to the NI Executive, a number of solar energy developers provide community benefit funds such as donations into local infrastructure and amenities.