FIT for the future

On 24th May, The Department of Energy and Climate Change (DECC) published the findings of their review on Solar PV cost control covering the proposed changes expected for 1st July.

The review covered two areas. Firstly, the level of Feed-in Tariff (FIT) rate as of the next reduction (DECC refers to these as degression’s) would be, and secondly, how would the FIT payments be controlled for future installations. As a result of the consultation process, and the feedback received from both the industry and homeowners, the government has delayed the next reduction in tariffs until 1st August, which is widely seen as the government backing the industry and reacting to the effects previous change.

By moving back the timeframe for the changes, this gives consumers an extra 31 days to get a system installed and benefit from the current FIT scheme before the changes, highlighted below, come into effect.

The proposed changes to come into force from 1st August:

• The generation payments for PV systems 0 – 4kW will be reduced to 16p/kWh from 21p/kWh
• This is to reflect the ongoing reductions in the cost of installations
• A full list of rates can be seen below
• The export tariff for new installations will rise from 3.2p/kWh to 4.5p/kWh
• This is to reflect a more accurate value of the energy exported to the grid
•  The duration of payments will reduce to 20 years from 25 years
• This is to keep the payments in line with other technologies in the scheme
• Companies who are claiming FIT payments for more than 25 installations will receive a reduced rate of 90% (multi-installation tariff) for systems installed after the deadline
• This is to reflect the reduced cost of installing multiple systems

Future changes to the Feed-in Tariff

•  Future reductions will be set for every three months (November, February, May and August) starting from 1st November 2012 following the August cut.
•  Depending on uptake the reductions can be delayed for up to six months
•  By integrating quarterly reductions DECC hope to offer a smooth reduction over time
•  The government have set an average reduction of 3.5% every three months, however this will depend on installed capacity during the three months prior to the announcement
•  The announcement will be made two months before any changes are to be made
•  The reduction can range from 0% to 28%
•  There will be separate rates of reductions for 0-10kW, 10-50kW and >50kW (includes standalone) bands

Beat the August cuts

With current generation payment rates at 21p/kWh the reduction to 16p/kWh as of August 1st highlights the importance of installing a system by the impending deadline to make the most of the current scheme. Even with the increase in export payments to 4.5p/kWh there will be an annual deficit of over £146 compared to the current scheme.

In addition new installations will only receive payments for 20 years in line with other technologies supported by the Feed-in Tariff scheme. Over the lifetime of the scheme this will reduce total payments by 20%, which based on current energy prices and annual FIT payments equates to just under £8,000.

Most reputable PV installers expect to book installations 2-3 weeks ahead, and during busy times this can increase to 4-5 weeks. With a cut in payments of 24%, many installers could be fully booked by the end of June. So if you are interested in a solar PV system for your home, call us today on 0800 0546 613 to find out if your home is suitable.

Bring down your electricity costs AND receive 25 years of cash payments

Transform the cost of solar electricity panels into an attractive investment

The 'Feed in Tariff' (FIT) is a bit of a misleading title. It is really a 'generation' tariff where you get paid for every unit of energy you generate, plus a bit extra for any surplus units you 'feed-in' to the grid.

The Feed in Tariff is designed to reward owners of photo-voltaic (PV) solar panels with direct, tax free, cash payments from your utility company, for the electricity you produce over the next 25 years from your utility company. The Feed in Tariffs started in April 2010 with the highest payments being made to owners of smaller PV systems. These payments have transformed the economics of installing a private system.

The Feed in Tariff turns the price of solar panels into a very attractive investment indeed.

From 12th December 2011, the top rate of Feed in Tariff is 21p/kWh.

From April 1st 2012 homes will also need to have secured an Energy Performance Certificate Level D to qualify for Feed-in Tariff income, which in most cases means good quality wall, window and loft insulation and efficient lighting.

Once your system is installed, commissioned and paid for, you will recieve an MCS certificate. You will need this certificate to apply for your Feed-in Tariff payments from your energy company who are obliged by law to act as your FIT licensee for 25 years. A list of all the contact details of the FIT licensees is available in this link: http://www.ofgem.gov.uk/SUSTAINABILITY/ENVIRONMENT/FITS/APPLY/Pages/Apply.aspx

Call FREE 0800 0546 613 and speak to an adviser today, for a no obligation quotation, or click here to apply online