Former IFA secretary general on “mini-revolution” in farming

Former IFA secretary general Pat Smith discusses his business Local Power Ltd and provides an in-depth insight into sustainability.

What problems do you solve?

Local Power operates with the ambition of helping home-owners, businesses and farms in particular, to reduce carbon emissions and energy costs. We target three to four areas, with a focus within the renewable energy generation space, encompassing solar photovoltaic (PV) and battery storage systems. Solar PV is the process of converting energy from daylight into electricity, to provide power for your electrical needs.

We also have an interest in bio-methane and in addition, provide LED lighting-retrofits for organisations on the energy-saving side of the business. We have also set up a smart buildings venture called IBMS, where we recently installed smart technology for a hotel, resulting in a significant reduction in energy running costs, amounting to €50,000 per annum. It’s another area of business that will continue to grow and grow.

In 2016, I also help found and chair the Micro Renewable Energy Federation. Today we have about forty members, running small businesses across the country, who have an ambition to basically make a living in the renewable energy space. We have made an impact in getting a grant introduced for homes; and are particularly proud of the recent announcement to get a grant introduced for farmers, to install Solar PV and battery storage.

What is different about your business?

Well, people would say Pat Smith is different. I work hard, and I am ambitious for the future and I believe in transparency and doing a good job for the people that I work with and on behalf of. Notwithstanding that, we have researched the various technologies with regards to Solar PV and battery storage systems and maintain that we have the best technologies in the country, by a mile. But we do give people the options, as it’s very important to make sure that people know what they’re buying, when they’re buying something. On the bio-methane production side, again we have partnered with a technology company that has a real track record, with one hundred and forty sites established across the world. The technology is very bankable and probably the most cost effective in the whole area of bio-methane production. Furthermore, with our innovative smart building technology, I believe that we are foremost, in both what we are doing and the manner of its delivery to this sector.

“With our innovative smart building technology, I believe that we are foremost, in both what we are doing and the manner of its delivery to this sector.”

What are the drivers of change in the micro-renewable space?

Government policy by way of incentives is most definitely an impetus for change and operates a multi-faceted approach. The first approach encourages by offering a grant and the second is by levying a tax on carbon. Technology is another driver, having become much more cost effective and reliable, particularly regarding Solar PV. Undoubtedly, climate change and sustainability are now also beginning to impact and transform peoples’ attitudes, regarding energy efficiency and technology adoption.

What is the payback period for a farm installation?

The payback for a sole trader can be as little as two to three years, based on the grant and the tax benefits, such as the hundred percent accelerated capital allowances, combined with utilising the correct technology that will perform for the next 30 to 40 years. The payback for a company is probably between three and five years. The variables are based on several factors which all very predictable; such as the cost of technology, what part of the country they are in, what the power generation output will be and lastly, the price they pay for energy today.

“There appears to be a mini-revolution happening in farming today, with many differing facets, including demographics and the age structure of farming.”

What are the general trends you see in farming today?

There appears to be a mini-revolution happening in farming today, with many differing facets, including demographics and the age structure of farming. In that regard, I’m particularly proud of the deal that we completed with the government before leaving the IFA, making it tax efficient for people to lease land on a long-term basis. It means that people can now retire with dignity and get an amount of money tax-free to help provide for themselves and their family. This deal also helps farmers who had an ambition to grow, to take on blocks of land, over an extended period, allowing them to use capital to increase production and help achieve additional economies of scale.

So over the next number of years, and one thing I would say to farmers, is that nobody owes you a living. If what you are working at is not delivering, don’t expect a different result if you don’t change what you’re doing. There are going to be opportunities for farmers to become involved in bio-methane production in the future. The biomass industry is being supported now, and there are going to be opportunities there as well.

I think what is critically important is that farmers, policymakers and agribusinesses put sustainability at the centre of everything that is going on. However, I don’t think it’s sustainable for a single farmer to own the whole parish, for example. Neither do I think it’s sustainable for a farmer with ten suckler cows to feel that he’s gainfully and fully employed or that he deserves an income equivalent to a farmer with three hundred cows. I think there must be balance struck in the future of farming. Scale is growing at a pace and the key for the farming community is efficiency in that drive for scale.

“As I said, it’s (business) all about people and if you can communicate effectively with people, business will be done.”

The importance of networking in business

Business is about people, you can have all the computers in the world, but people deal with people, and I look forward to dealing with many, many, businesses as we continue to grow. I have 2,500 names on my phone, having developed a large network of friends and associates over the years. I have the greatest regard and respect for the farming community and as I travel the country, I am getting on mightily both with them and the agribusiness sector in general. This is a small country, but in a manner of speaking, it’s a big country and there is a lot of opportunity out there. My best initial move since establishing the business was in how I partnered. I believe in partnerships, very few, but key partnerships to help me scale this business. As I said, it’s all about people and if you can communicate effectively with people, business will be done.

What advice would you give to someone starting in business?

Starting a business is never easy. You must have a determination and a belief in what you’re hoping to achieve. Secondly, do your research. There’s no point in being a busy fool. Somebody once said to me, ‘fail fast’ and you know, there’s a bit of merit in that because I’ve seen too many people struggle for years, trying to make something work and not changing the dynamic. But if you have a good idea and everyone comes up with a good idea; but not every good idea can be made successful. However, a lot of good ideas never succeed because people are not brave enough to have a go at them. If you have the wherewithal, and have a goal, there is a lot of support out there, but be prepared for the long road. We’ve all met very successful people, but they weren’t overnight successes and involved a lot of hard work and endeavour over many years.

Interview by Brendan Byrne