Solar Photovoltaic
What is its future?

Many of you will have seen the rapid increase of solar panels being installed on roofs at the last few months of 2011.  This rush was due to the Government reducing the Solar Power Feed in Tariff (FIT) payment on new installations from 43.3p/kWh to 21p/kWh with only 6 week’s notice. This action has now been deemed by the courts to be unlawful, and that installations commissioned after the 12th December (government imposed cut off date) should be eligible r the higher tariff. However, this is not the end of the story as the Government has now appealed to the Supreme Court and we await their judgement. 

There is no doubt that the FIT scheme needed some changes to take into account the rapidly falling purchase prices that households could take advantage of. The returns available were well over 10% pa and sometimes over 15%pa which in these austere times were starting to be seen as an unfair windfall for the affluent.

Looking back, the execution of these changes is now looking like a very knee jerk reaction. As a result thousands of installations took place in the 6 weeks leading up to the 12th December than would have done in this period and the following 4 months leading up to the previously planned April review date combined. With all these extra systems having been installed at the higher tariff and return rates than was planned for, future tariff rates are having to be adjusted down to balance the books.

On a more positive note the newly announced changes to the governance of the FIT scheme are aiming to even out the returns available regardless of the time point at which you install. However, it does appear that the general trend on returns will be slightly downwards in the long term.

So, what does this mean for the consumer?

Well, this very much depends on if you have already had an install or are thinking about it in the short or long term. The general outlook is still good, wholesale prices have dropped further since last December meaning that typical returns are currently 8-12% pa, which in this economic climate compares very well. Fuel inflation, although appearing to have slowed a little is still a major concern for many. 

For those who had a system commissioned prior to the 12th December deadline there is no change. For those who have a system installed between 12th December and 3rd March will receive the 21p FIT payment and may receive an extra windfall if the government loses its Supreme Court appeal. For those installing between 3rd March and 1st April will receive a FIT rate of 21p but have no chance of the windfall if the government loses its appeal.

For more information or a no obligation survey, please contact Richard Hoyle on:
0845 2000 836 or