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Tag: Pv Installation

Government to Slash Feed-in Tariff for Solar PV

Energy Saving Trust FIT review fact sheet

Fact Sheet on the proposed changes to Solar PV Feed-in-Tariff rates

Last updated 26 October 2011

Introduction

The UK Government is proposing to reduce Feed-in Tariffs (FITs) for new solar photovoltaic (PV) installations as part of their comprehensive review consultation. See  www.decc.gov.uk/fits

If you install solar PV and your FITs application is received by your FIT supplier (also known as FIT Licensee) on or after 8 December 2011, you could be affected by the proposals.

Please note that these proposals are currently under consultation and are therefore not final.

However, we recommend customers should use the figures in the consultation if they are planning to install after 8 December 2011.

Only PV systems are covered by the UK Government’s current FITs consultation. Other FIT-eligible technologies will be considered as part of the second phase of the comprehensive review due to be published shortly.

Summary of proposals

The UK Government proposals which affect householders most are:

  • A reduced rate of 21p/kWh for solar PV installations <4kW – tariffs will be introduced from 1 April 2012 and will affect all installations with an eligibility date on or after 8 December 2011. See definition of eligibility date below. This tariff rate is designed to provide householders with a rate of return of around 4%.
  • New domestic energy efficiency requirements – from 1 April 2012, domestic installations must be accompanied by an Energy Performance Certificate (EPC) with a level C or above/which has completed all „Green Deal. measures. Where a domestic property does not meet these energy efficiency requirements, the Solar PV installation may receive a lower tariff.

The table below compares typical income and savings made for an average sized solar PV system in the UK along with simple payback period (cost divided by combined income and savings)

FIT Rates Total annual earnings and savings with a 2.9kW system Simple payback (years)
Current 43.3p/kWh £1,190 10
Proposed 21p/kWh £    640 18
  • 2.9kWp system, install cost of £11,500
  • Total earnings and savings include income from the generation tariff, export tariff on 50% of total generation and up to 25% of generation used on site.
  • Simple payback will depend on capital cost so the simple payback periods may vary depending on quotes received. Cost of solar PV has come down significantly over the years so we would expect the simple payback period to come down gradually.
  • Annual generation has been calculated as 853kWh/kWp using the Energy Saving Trust Solar Energy Calculator (see below) using the postcode SW1A 0AA (Westminster Palace)
 

To find out more about how this will be implemented, please download the full fact sheet:

 

Don’t delay – contact us for a quote NOW

If you are thinking of Solar PV, – it’s time to stop thinking and act – NOW

If you’ve been considering Solar Photovoltaic (PV) for your home or business, then with the planned changes being brought forward, then it really is time to act NOW. As the saying goes Act Now or Regret at Leisure (sic).

Too many times in life we say “If only I’d” or “I could have”, or “They were lucky”.

Back in February 2011, the Government announced a Strategic review of the Feed-in Tariff Scheme, aka FiTS or FiT. that review was originally scheduled to be delivered at the beginning of 2012 (January) with implementation form March 2012, and at the time it was widely believed that it would result in a slightly large increase in the degradation rates of the Feed-In Tariff Scheme, i.e the rates would go down.

Well early indications from Greg Barker are that it will do far far more than that.  FiTS was NEVER intended as an investment vehicle for pension funds, in lieu of Tax free ISA’s as the like, well in the case of Solar PV, that is EXACTLY what it has become.

Over the past 2 years the cost of the materials associated with the installation of a Solar PV has fallen dramatically and Solar panels have in the wholesale market place now become a commodity as opposed to a specialist item, with even main-stream electrical distributors stocking all the parts for a solar PV installation. The effect of this is that the capital  cost of installing a 4kWp system has fallen from around £20,000 to less than £14,000 and 50kWp systems have fallen from £250,000 to around £125,000 – £150,000.

So what has that got to do with you? As I mentioned above, the original purpose of FiTS as stated on the Government’s website is:

Through the use of FITs DECC hope to encourage deployment of additional small scale (less than 5MW) low carbon electricity generation, particularly by organisations, businesses, communities and individuals who have not traditionally engaged in the electricity market. This will allow many people to invest in small scale low carbon electricity, in return for a guaranteed payment for the electricity they generate and export.

It was never supposed to be what it has become – the most lucrative investment opportunity in the UK.

The problem is that the Government has changed it’s tune, in the early days they were happy to promote it, as you can see in our download : Worcester Renewables – Free Guide to Investing in Solar PV Greg Barker was more than happy to encourage people to invest in Solar PV when he said

“Feed-in Tariffs provide some of the best secure investment returns available in the market”
Greg Barker, Climate Change Minister

Well, a lot of people took his advice, and the effect was a massive increase in the take up of solar PV – just what he wanted!

However all FiTS payments despite being paid by the electricity companies from a surcharge on all electricity bills is under EU rules considered Government expenditure, and with Strategic Spending Reviews in place, Greg Barker had to cut expenditure in this area. The catch 22 situation here is that cutting FiTS immediately stats to undermine the whole Government Green / Renewables investment strategy and may cause them problems with meeting their EU renewables targets.

So what did they do – First the launched the Strategic Review – what was supposed to be a year long exercise looking at the fundamental structure of the FiTS – and secondly the launched an emergency review which came into force in August and promptly killed of all the large scale solar PV investment.

Well the Strategic Review is about to be published – most sources are suggesting mid October, and the outcome is expected to be swift and hard, the key things are a MASSIVE CUT in FiTS payments to new Solar PV installations, and instead of waiting until April 2012, it is anticipated that this could come in as soon as JANUARY 2012, even back in August, I was predicting that it could go as low as 30p / kWh (for =< 4kWp systems) compared to the current 43.3p / kWh – and that would be in line with the above (£14,000 / £20,000 x 43.3p = 30.3p), some people are predicting it could go as low as 26p / kWh.

The time to act therefore is NOW – don’t delay for a free quotation click here: Request Your FREE No-Obligation Quote

To find out just how LUCRATIVE the current scheme is – and to see how much you will earn from the FITS – Click here: Energy Saving Trust – CashBackCalculator

For more background information on how rapidly this area of FiTS see these recent articles:

Worcester Renewable Tweets with Greg Barker

The new FiT, prices and the future for solar in the UK: Part 1

Worcester Renewables Ltd is an MCS Registered Installer of Solar PV systems and installs both Domestic and Commercial Systems, and is registered with and bound by the REAL consumer code.