The RCT Bottleneck: How Tax Rules Are Slowing Solar

Ireland has set ambitious targets: 8 GW of installed solar capacity by 2030, with thousands of new homes, businesses, and solar farms coming online each year. The projects are there. Technology is there. The urgency is there.

But one thing is missing: people to build it.

While Ireland has grown a strong cohort of developers, suppliers and local installers, many of the most critical skills needed to scale solar safely and at speed remain in short supply. That includes:

• Grid engineers
• Electrical and mechanical engineers
• Landscape architects
• Ecologists
• Quantity surveyors
• Construction planners
• O&M specialists
• Environmental consultants

Most of these are in high demand across Europe, and often must be brought in from outside Ireland to meet project timelines. Unfortunately, our tax system is working against us.

What is RCT, and why is it a problem for solar?

Under the Relevant Contracts Tax (RCT) system, Irish-based companies that hire non-resident subcontractors (including many solar specialists) must withhold a portion of their payment to cover tax liability. This is typically 20% or 35% depending on the subcontractor’s clearance status with Revenue.

Even when a refund is possible later, the immediate cashflow impact is severe - especially for smaller firms. That makes Ireland a far less attractive place for highly skilled workers to operate. Many simply take their talent elsewhere.

“Solar is shovel-ready. But without the skilled hands to build it, we’re stuck.”
— Ronan Power, CEO, Solar Ireland

A bottleneck we can’t afford

Ireland is already at risk of missing its renewable energy targets. The Climate Change Advisory Council has warned of billions in potential EU non-compliance fines, with a RED penalty estimate between €500 million and €4.4 billion.

We can’t afford to let a fixable administrative barrier be the reason why timelines slip and projects stall.

Our Budget 2026 ask: fix RCT for solar

Solar Ireland is calling for practical, targeted reform:

Exclude solar development from RCT definitions
or
Allow 0% RCT for non-resident subcontractors with valid tax clearance from their home country.

This change wouldn’t just unlock capacity — it would create jobs, attract international investment, and help us deliver on Ireland’s clean energy promises.

Want to help?

• Share our infographic: "8 Critical Roles We Can’t Fill"
• Share and tag policymakers in our LinkedIn post
• Read and share our full Budget 2026 requests