The changes to the Feed-in Tariff were initially scheduled to come into effect from 1st July 2012, but have been delayed by a month following detailed consultation between DECC, the Solar industry and consumers, to provide time for industry to adapt.
One of the most positive changes for the Solar Industry is the announcement that Solar Panels will be added to the UK’s Renewable Energy Roadmap, joining other renewable technologies including biomass electricity, renewable transport, and onshore wind.
The Renewable Energy Roadmap sets out a comprehensive action plan to accelerate the UK’s deployment and use of renewable energy, and the addition of Solar photovoltaic (PV) will ensure that it is treated as a key renewable technology by Government.
Alan Aldridge, Chairman of the Solar Trade Association, welcomed this change:
“We broadly welcome many of the Government’s decisions for how Solar PV will be treated in the FITs scheme and wholeheartedly welcome the inclusion of Solar in DECC’s updated Renewables Roadmap; this should reassure consumers and Solar companies alike that the Government recognises and stands behind a major role for the Solar Industry.”
Another change will see the FIT rate drop from 21p to 16p, for Solar Panels under 4kWp installed from 1st August 2012, to reflect the fall in cost of technology. However, this is over 2p higher than the 13.7p that DECC forecasted the FIT rate could be cut to before yesterday’s announcement and, according to DECC, will still give a healthy Return on Investment of around 6%.
Other changes include increasing the export tariff from 3.2p to 4.5p and reducing the length of the FIT scheme lifetime from 25 to 20 years for Solar Panels installed from 1st August. The FIT rate will also continue to reduce by 3.5% every quarter, although if uptake in the Solar Panels market is low the proposed cuts will be skipped for up to two quarters.
The graph shows how the FIT rate will digress on a quarterly basis from 1st August 2012, presuming that there are no quarterly cuts skipped due to low uptake of Solar Panels.
As the graph highlights, now represents the best time to invest in Solar Panels. If your Solar Panels are installed before the FIT changes take place from 1st August 2012, you will receive the current FIT rate of 21p. This rate is guaranteed and linked to inflation for 25 years, and will give a highly profitable Return on Investment of between 9% and 11%.
Industry specialists EnergyLink can arrange up to three free no-obligation surveys from MCS accredited Solar Panels Installers.