New Feed-in Tariff Starts Today

Monday 12 December 2011

Following protests and lobbies from the UK Solar Power Industry, today, Monday 12th December, marks the start of the new Feed-in Tariff rates for UK Solar Photovoltaic (PV) installations.

Around 500 people under the banner ‘Cut Don’t Kill’ – a collection of Solar PV companies and green groups – had campaigned against the new rates. However a commons debate ruled in favour of the new Feed-in Tariff which aims to make the Solar Industry more sustainable.

The 12th December deadline, announced on 31st October, lead to an increased amount of Solar applications. Trying to beat the cut-off date placed added pressure on Solar PV installers to have the systems installed in time and created a shortage of Solar equipment.

With the new Feed-in Tariff now in place and the dust beginning to settle, it should have a positive effect for the Solar PV industry as equipment begins to become available and installers have more time to fit systems. Equipment price reductions are also expected to continue.

So, what type of return does the new Feed-in Tariff give?

The new Tariff pays 21p for each unit of electricity generated over 25 years for systems up to 4kWp.

On a typical 2kWp Home Solar system, at a cost of around £7,000 to £9,000, the new Feed-in Tariff gives an estimated return of £492 per year, and will recover the cost of installation in 16 years. This represents a lucrative Return on Investment of 6.2%.

As well as offering the opportunity to earn a tax-free income for the 25 year Feed in Tariff period, Solar Panels will also lead to significant reductions on energy bills. Because of this, Solar Panels represent a highly profitable, secure, and risk free opportunity.

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