Is the ever changing Feed In Tariff still fit for purpose?

Or to put it another way, after the non-stop back-tracking by the Coalition Government and constant changes is it still worth investing in installing Solar panels and wind turbines etc. Well remarkably, in the case of Solar photovolatic solar panels there is still a very strong case until 31st October 2012 (and possibly longer) for switching to free, green, renewable energy.

The main reasons for this are threefold. Firstly, the cost of installations has dropped in the last year by almost 50%, so less up-front investment is now needed to fit solar panels and inverters. Secondly, the export tariff has increased by 50% and thirdly the cost of energy bills continues to rise. The net result is that an 8-10% R.O.I. is achievable (the same as a year ago!) despite the guaranteed FIT period being cut by 20%.

Installing Solar Photovoltaic Panels to Your Home Still Offers Same R.O.I. as in 2011
Installing Solar Photovoltaic Panels to Your UK Home Still Offers Same R.O.I. as in 2011

That said, it is worth doing your research thoroughly, as well as crunching the right numbers, for there may come a point in the future when the Government will make the Feed in Tariffs so unattractive that a decent return on investment is not possible. According to the Energy Saving Trust website “The UK Government have announced some significant changes to the Feed-in Tariffs. If you are thinking about installing a FIT eligible technology then you should be aware of these changes. These changes cover tariff rates, tariff lifetimes, details of the methods for changing tariffs in future and scheme administration issues.”

The same article on the Energy Saving Trust website entitled “UK Government changes to Feed-in-Tariffs – New and proposed” goes on to summarize the changes “For solar PV installations with an eligibility date on or after 1 August 2012:

  • The new tariff rate for solar PV <4kWp will drop to 16p/kWh with an EPC band D or higher (if band E or less the lower tariff rate has also dropped to 7.1p/kWh).  Full tariff table below.
  • The export tariff rate will increase to 4.5p/kWh for all new solar PV installations.
  • The tariff period (lifetime) will be reduced for solar PV from 25 to 20 years for all new solar PV installations.
  • The tariffs are to be reviewed every three months and will be revised according to deployment rates”

The Government has not helped consumers or the renewable energy industry by it’s past procrastination and subsequent constant moving of the goal-posts, so even the above latest changes could all be changed again on 1st November 2012. So the only certainty that UK property owners currently have is that they will get a decent return on investment as long as they fit and have their Solar PV installation commissioned before then. So whilst the “latest” FIT that came into effect on 1st August 2012 is currently just as fit for purpose as it was in 2011, it will only remain so if the overall equation does not change too much in the wrong direction. As for now the Feed-in-Tariff for Solar PV provides a more than sufficient return on investment for those wishing to switch to the cleaner free green energy that Solar photovoltaic provides. For further information contact Hazlemere Green Energy about investing in Solar PV


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