As this is a financial resolution, in accordance with Standing Order 210 the debate will be done in Committee style. Accordingly, there is no restriction on the length of time of Members' contributions, but perhaps, with the agreement of the House, we could agree that each Member of the House when speaking will be cognisant of the available time for other Members and that the debate will be brought to a conclusion after half an hour. Is that agreed?

Agreed.

In answer to this point, I provide accommodation and there is nothing to be ashamed of in that.

I call Deputy O'Donoghue, please.

I too also warmly welcome any measures that will result in a decrease in the cost of installing solar panels. I do not see any good reason in the world all the roofs we have on all the buildings in the country, whether on private dwelling houses or farm buildings, should not have solar panels on them. This would be a sensible aim for the Government and all of us to be promoting. It would certainly be a help in the long term in reducing people's energy costs and a sensible and affordable solution, given proper supports and grant aid being provided to people to install these panels.

I wish to highlight, however, and this aspect was touched on briefly, that we must be careful when an announcement is made. I listened carefully when the Minister for the Environment, Climate and Communications made his announcement in this regard, but then I answered the phone when it lit up like a Christmas tree with the very important people who actually install the solar panels ringing me. If only we knew the chaos that announcement created for a couple of days. This is where common sense and being practical comes into it. I refer to the announcement the Minister made that the cost in this regard was going to reduce by €1,000.

Did he not realise there would have been homeowners who had booked contractors? For instance, contractors would have been due to work on houses next Tuesday. This would have been scheduled into their books and all of a sudden their customers were ringing them up and saying, "Oh my God, the Minister is after making an announcement that there is €1,000 reduction so do not come to me on Tuesday, wait until I get clarity on this." Where was the clarity coming from the Government? There was nothing. There was a loud vacuum coming from you all, to be honest. I am not being critical, I am being factual. All I am trying to do is advise that, in the honour of God, when the Government is making an important announcement like this in the future it would think of the people and the contractors on the ground, who are relied on. The Government must know there are people who do solar panels for just domestic premises and they do not do any for businesses. It affected people's work programmes literally in the hour following the announcement. The next morning, when the men were getting up in their vans and setting off in their vans going to, for example, a Mrs. Murphy's house up or down the road, Mrs. Murphy was on the phone saying, "Whatever you do, do not come to me tomorrow because I do not want you." I would not blame Mrs. Murphy for not wanting them because she would be hoping to get her €1,000 of a reduction.

I am glad that subsequently, when it was highlighted to the Minister, the Government had a Cabinet meeting this morning, and the Minister raised the issue. He came out from the Cabinet meeting and he did give clarity. That was most welcome. I would ask the Minister, Deputy McGrath, to give even more clarity because there are people who are still nervous about what was announced, the manner in which it was announced, and the timeframe. In other words, if Mrs. Murphy has booked the contractor for next Tuesday, will she get the reduction? What will be the actual workings of the announcement? This is important because we want to keep people working on it and we want contractors who have their order books to not have voids in their days' work. If they are relying solely on the domestic work they cannot say they will go away and go to such a business while Mrs. Murphy is making up her mind as to whether to go ahead or not. All I am asking is for the Government to be very clear about this announcement and other future announcements. I would really appreciate it if somebody could explain this to the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan. It is not rocket science. When one is a Government Minister, one is playing senior hurling; one is not making an announcement to the lads in the corner. This is serious business. One cannot make an announcement without thinking of the implications of what one is saying.

The Social Democrats' proposals would see the current vacant properties tax increase by more than 33 times to 10% of the property valuation. If implemented, this would mean that the owner of the average vacant home, using the average home price of €320,000, would pay a vacant home tax of €32,000 per year, up from the current €945 per year. This proposal is just plain bonkers and is destined to fail. A vacant property tax falls into the category of something that sounds good, that will play well politically but that, ultimately, will deliver next to nothing.

I would support a vacant council homes motion if it were put in front of us, but do not get us wrong. It is galling to have so many empty homes in the midst of such a chronic housing shortage. Vacancy is a complex phenomenon and one that will simply not be magicked away by tax. Let us consider, for example, the person with an inherited home who may want to do it up for a son or daughter but might not have the funds to do so. In a place such as west Cork, having to pay this tax to the Government is almost the equivalent of a yearly industrial salary of €30,000 per year in a vacant home tax. Such a policy proposal is nothing more than a communist, left-wing, political point-scoring exercise. Let us imagine how many vacant homes are out there due to people who may be in hospitals or in nursing homes or who may be cared for by relatives. They would have this horrible tax applied to their homes when most of these people are already paying for a fair deal payment.

Today, the Social Democrats and the left will want to force people who have a second home to start paying tens of thousands of euro in tax, and tomorrow they will want to tax people who have vacant homes. We will not support this attack on hard-working homeowners and families who are struggling to get by.

We would support a motion to ease the planning restrictions on young people trying to start building their own homes on their parents' property, which is almost impossible in my constituency. This leaves many people houseless at this stage. We would also support measures to deal with void council houses.

Three further Deputies are offering, so perhaps they could take about two minutes each, and then the Minister would have a chance to respond.

I thank the Minister, Deputy McGrath. It is broadly welcomed, generally, by everybody here today to see a VAT reduction in the supply and installation of solar panels. It has been brought in as a financial resolution and I thank the Minister for explaining that as I did not realise it is so that we can implement this on 1 May, prior to the Finance Bill being passed. This demonstrates the speed and the commitment of this Government to act on renewables and address cost-of-living expenses for people to help them with those energy bills, to help them with future-proofing their housing, and in making them more energy efficient and energy resilient.

Deputy Nash referred to the planning exemptions, which were quite important for people. They were not that onerous or difficult but it was another step to overcome that might have been off-putting for people. We introduced other measures as well, including a substantial grant scheme that was introduced by the Sustainable Energy Authority of Ireland, SEAI, to allow people to do energy efficiency works on their houses, including the installation of solar panels. There is a substantial grant for that. We have also introduced the feed-in tariff. Where there is excess energy that a person may not be using at a certain time or on a particular day, he or she will get paid for it at a fairly reasonable unit rate per kWh. Free solar panels are going onto schools. It all points to the fact that solar energy is here. Not much happened with regard to solar panels in the past and we have seen a real acceleration in Ireland in the past three years, through this Government. Solar energy has always worked in Ireland. Deputy Doherty said that solar energy will be important but it is being delivered at the moment. I see more and more rooftops across the country with solar panels going up on them. The first grid-connected solar farm is in my own constituency of Wicklow. It all demonstrates progress and an acceleration to zero. We need to accelerate to net zero and all of these measures will help.

I have a couple of questions for the Minister, which I will raise during the debate on the Finance Bill, which will start shortly. We are tight for time. We can apply a VAT reduction to supply and install panels but is it possible under that EU Council directive to apply that reduction to heat pumps and domestic battery energy storage systems? That would seem to align with what the EU is assisting us with in terms of energy resilience and dealing with energy costs, inflation, reliability and resilience. Does this measure mean the VAT rate is only available on a package? If I, as a homeowner, wanted to go to an electrical wholesaler or supplier, could I buy solar panels over the counter with a zero VAT rate and employ my own roofer and electrician to install them or is this exemption only available as part of a package? Will that package be dependent on installation by an SEAI-approved installer? There are ways and means we can consider to do all of these things. The grant package is very helpful for people to be able to go out and get an approved installer but there are others out there with the capability to do self-installation. That is possible and perhaps the Minister will clarify the situation for me.

I too welcome the decision the Minister has made. As the last speaker mentioned, we have gone solar. Táimid iontach ar fad. It is fabulous that the sun is shining. We must do something meaningful because for too long we could cross the Border into Northern Ireland and see solar panels on many buildings, domestic and otherwise. I note this measure is confined to domestic use. We are being dragged kicking and screaming across every line with everything here, despite the drastic and punitive measures that are being put on people. Any supports are dragged from the Government while it is kicking and screaming. This measure is for domestic use, and I welcome it, but when are we going to have such a measure for farm and commercial buildings? We all know hoteliers and other people who looked at the available schemes and left them there because they were Mickey Mouse schemes that were not viable and would not justify the outlay or expense.

I welcome this 13.5% VAT rate. Other speakers have asked that if Mary or Joe Bloggs walk into a wholesale shop to buy some equipment, can they get the VAT rate or will it be confined to builders or suppliers. I would like the Minister to answer that point.

I welcome this initiative. As a contractor myself, I wish to ask the following. When I buy something off the shelf, it includes 23% VAT. If I fit it, there is 13.5% VAT. The 23% VAT rate is removed and the 13.5% rate is applied. If somebody comes in off the street and buys a solar panel at 23% VAT before getting his or her own installer, does the grant cover that?

Farmers have many rooftops. We are talking about filling rooftops with solar panels, with which I agree. If a farmer is not registered for VAT, will he or she qualify under the scheme? Will farmers be allowed to do more than 6 kWh, which is the limit for a household? The maximum for a household is 6 kWh. I know of households that can give 20 kWh but the grid is not able for it. At the moment, the grid cannot accept 20 kWh from a house. The maximum is 6 kWh. Will the Minister clarify the situation? Farms or businesses may have extra roofs but are not registered for VAT. Anyone who is in business is registered and can claim the VAT rate. However, can anyone who is not registered for VAT also supply solar panels with a zero VAT rate? We need to ensure there are solar panels for all. We do not want it to be like Housing for All, which does not provide for everyone. Will the solar panel scheme provide for all?

I thank all Deputies for their contributions and overall support for this measure. I will seek to address a number of the questions that have been raised. One question related to the reason the installation of solar panels is now permitted to attract a zero rate. That is a specific change that was made as a result of the 2022 VAT directive. One of the options that directive provides for is that a zero rate would apply within category 10c. That directive is for the supply and installation of solar panels on and adjacent to public and other buildings used for activities in the public interest, housing and private dwellings. That addresses another question that was raised about farm buildings. Farm buildings are not permitted under the VAT directive to have the zero rate applied to them. It is, in effect, for public buildings, housing and private dwellings. The change we are making here relates explicitly to residences and private dwellings. That is the change we are making.

I note the points made by Deputy Michael Healy-Rae about the announcement of the measure. I took the proposal to Cabinet on 5 April and formally announced the measure at that point. I also announced the details of the date on which this change would come into effect. I was aware, of course, of the questions that had been raised in the days leading up to the announcement and we sought to address those as best we could when the Cabinet made its formal decision. I made my first public comment on the issue when we had a Government decision in that regard.

It should be recognised that we are making a lot of progress in respect of the supply and installation of solar panels. Approximately 50,000 homes in Ireland now have solar panels. Approximately 17,000 solar installations were connected with the grid last year. By any measure, that is significant progress. Deputies Nash and Matthews have acknowledged the removal of the requirement for planning permission for the installation of panels in private homes. That has been a positive development. We are seeing the growing success of the microgeneration support scheme and the increasing number of applications through the domestic solar PV scheme operated by the SEAI. There is an enormous amount of potential for further development.

I too have received correspondence from providers and people who have recently paid for and had solar panels installed. They have asked whether this change can be applied retrospectively. The answer is that it cannot. As we know, VAT operates on two-monthly cycles and that is why I am using the financial resolution, subject to the approval of the Dáil this evening, to allow this important measure to come into effect on 1 May, which is the start of the next VAT period. It is not possible to apply this change to the previous VAT period, which began on 1 March.

I have answered the question about farm buildings. They are outside the scope of the EU VAT directive and, therefore, a zero rate cannot be applied to such buildings.

There was also a question about price and the impact this measure will have. It removes the VAT but does not, of course, control the pre-VAT price. That is where we need competition to have an impact. Of course, we want consumers to benefit from the elimination of VAT.

This is an investment by the State. It is an investment by taxpayers by way of tax forgone. This is a tax expenditure that the Government is proposing and hopefully the House will approve this evening. We will have a further opportunity in a moment when the Finance Bill is going through to tease out some of the other questions. The reduction in the VAT does not only apply to an SEAI-registered installer; this is the application of a change in taxation law. Therefore, it applies across the board in that respect. There are some other questions that we will get a chance to come back to as we debate the Finance Bill over the next hour and a half.

What about supply and fit?

We can come back to that during the Finance Bill debate.

It is supply and fit, and not supply only.

It is not supply only so someone can go in and-----

Therefore it is 13.5% VAT and not 23%.

Someone can go into a shop and purchase a solar panel, and the VAT will be zero on that.

We must move on.

I want to raise a point of clarification, which will be very brief, 30 seconds, to be clear on the timeframe of what happened. The Minister was prudent and did his job properly. He went to Cabinet, made his announcement and gave clarity. What actually happened and caused chaos the length and breadth of the country was that another Minister tried to upstage him by going a couple of days beforehand and making the announcement, trying to be ahead of the Minister for Finance.

We cannot go into that.

Just to be clear, that is what happened. One Minister tried to upstage the Minister for Finance and he caused chaos.

Please-----

It is a fact.