Headlines this month...

Monday 9th January 2012

Confusion still reigns with regard to the Feed in Tariff for solar PV with the government appealing against last month's court ruling that the decision to effectively impose cuts to feed-in tariffs before the end of the consultation period – ie, April 2012 - was ‘retrospective’ and ‘unlawful’.

As it stands, domestic customers will receive a reduced tariff of 21p per unit (kilowatt hour) for solar PV installations post December 2011, compared to a rate of 43.3p per unit for customers who managed to complete their installations prior to that date. As a result, the payback time on the cost of the panels for those who didn’t manage a pre-December installation, rises from 10 years to 18 years and the surplus profit drops from £15,000, over the life of the panels, to just £3,800.  Suddenly, solar PV installation doesn’t seem quite such an attractive proposition.

However, if the cost of solar panels was to halve (quite possible now they are being mass produced in China), the payback time under the new tariff would effectively drop to 11 years and the profit would increase to £7,700.  And an increase in energy prices (also likely) would also affect the figures.  Add to that the fact that the installation of solar PV is likely to have a positive impact on the sale of your house (with the new owner benefiting from reduced energy bills and a guaranteed income of around £550 per year), and it may still be an option worth serious consideration.