Are the UK Government About to Kill Solar Subsidies?

Well the short and unfortunate answer to this one is yes, it looks like they are. The Government’s most recent proposal it to cut the domestic Feed in Tariff from 12.47 p/kWh to 1.63 p/kWh. This change will come into effect from January 1st and while that’s not quite the death of the domestic Feed in Tariff for solar, it’s certainly pretty close.

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A reduction of this scale is patently daft. It is almost certain to do untold harm to thousands of small UK installation companies and put tens of thousands of jobs at risk. This at a time when solar PV in the UK was on a clear path to being subsidy free in the short term, is about the worst kind of vandalism Government policy could possibly have inflicted. The policy is hard to understand, since it will do little to correct any overspend. Tanking the UK’s most popular renewable technology in favour of an energy policy that seems now to be based on Fracking and Nuclear is an interesting choice. Just why is this Government so influenced by big energy, fracking and nuclear and so blind to the success they have helped foster in solar PV? Fracking is immensely unpopular and new nuclear capacity is more heavily subsidised than solar, so this policy is a head scratcher.

I doubt the Government cares too much about what we think about that. The wording of the “consultation” document doesn’t sound like they have any intention of turning. So, I guess it’s time to ask what does this mean for you the home owner or small business and is solar still an option?

Well, the tariff rate is due to drop on January 1st. Right now, you still have the opportunity to avail of FIT and lock in the 12.47 p/kWh for the 20 years of the scheme. Here is how the two options compare:

4kW Solar PV at 12.47 p/kWh

Electricity Generated / Year 3,400 kWh
   
FIT Income / Year £424
Export Income / Year £82
Savings on Electricity / Year £265
   
Yearly Income and Savings £771
20 Year Total Income and Savings £15,425

4kW Solar PV at 1.63 p/kWh

Electricity Generated / Year 3,400 kWh
   
FIT Income / Year £55
Export Income / Year £82
Savings on Electricity / Year £265
   
Yearly Income and Savings £403
20 Year Total Income and Savings £8,054

So if solar panels are something you are considering for your property, now is definitely the time to do your investigation. To lock in the existing rate, your system will have to be installed and accredited before the end of the year and with a rush to beat the tariff drop likely, you should start investigating your options as soon as possible. As always, we recommend that you contact 3 or more accredited installers in order to find the right company for you.

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