The government is proposing to cut the lucrative Feed-in Tariff scheme for solar PV systems by as much as 87% by 1st January 2016.
The Department for Energy and Climate Change (DECC) published its review of the Feed-in Tariff scheme (FITs), the scheme where householders are paid for the electricity they generate and export back to the grid, on Thursday. It suggested that the tariff for a 0-10kW system decrease from 12.92p/kWh to 1.63p/kWh.
These cuts mean that an average home will earn just £192 a year from installing solar panels, compared with the £600 homeowners can expect currently. And it doesn’t stop there – the government want to introduce default degression each quarter, which could mean that some subsidies for solar could end on 1st January 2019. The domestic solar PV systems have been hit the hardest, so FITs for systems under 10kW can be expected to stop first. This leaves consumers with no support or incentive to install solar panels.
Amber Rudd, Energy Secretary, said “Government support has driven down the cost of renewable energy significantly” and that renewable energy should “survive without subsidies” now that solar panel installation costs are down by 70% compare to five years ago.
But Philip Sellwood, from the Energy Saving Trust, said:
The new rate is no longer cost effective for householders. Prices would need to fall by £840 by January for new panels to be cost-neutral in a typical home.
Now is the time to get solar panels, and you need to act fast. The Solar Trade Association has warned that there will be a “massive market rush”, so leave it too long and you will miss out on the more generous Feed-in Tariff. Even though the government has cut FITs many times since 2010, solar panels are still a worthy investment if you move quickly. There are still benefits to getting solar panels:
- Earn up to £14,000 with the higher rate of FITs over 20 years
- Generate your own electricity and reduce your bill
- Cut your carbon emissions by generating your own renewable energy