Going solar: eco-friendly homeowners are facing cuts to the Feed-In Tariff in early 2016
PUBLISHED: 15:17 07 September 2015 | UPDATED: 15:17 07 September 2015
Thinking about installing solar panels on your home? Don't think for too long. In 4 months time, the idea of going green looks to be considerably less sweet.
The government regulations on the UK’s ‘Feed-in Tariff’ (FIT) has had its ups and downs, with notable alterations proposed when the coalition took power four years ago. Reagrdless, the scheme remained in place and users of it continue to reap great benefits. FIT offers homeowners generating their own energy - with wind turbines or solar panels for example - a fee for doing so.
For each unit (kilowatt hour) of electricity you generate you receive a generation tariff, calculated in accordance with the size of your system, the type of technology you use and when your system was installed (and who did it).
The government pays 13.8p for every kWh of energy your solar panels use as well as what you don’t use (known as the export tariff). The scheme is beneficial to energy bill balances too, given that your electricity is free when your panels are in use. Typically you look to earn and save nearly £14,000 over 20 years and some users qualify for free installation dependant on circumstances.
But a dark cloud looms on the horizon in the form of tariff cuts in January of next year. The amount the government will potentially trim from your pay out is a massive 87 percent. In other words, £8,000 of a potential 20 year earning on the scheme will be lost if you choose to switch to solar resources in 2016.
Can you beat the cuts? Simply - yes, by installing before January 2016 to secure yourself the current higher rate of FIT.
Once your panels are registered and you lock in your guaranteed payments for the 20 year lifespan of FIT, you will earn up to £8,143.20 more over 20 years by installing in 2015 compared to installing in 2016. Waiting until next year means it will take around 27 years to return on investment, While acting this year gives the homeowner a return on their investment in under 10 years and a healthy £7,210 profit after 20 years.
Quick facts on solar energy:
Various companies offer free panels and installation known as the Green Deal Scheme. However if you take this route, the installation company will recieve the FIT pay outs instead of the homeowner. You’ll still see the benefits of solar though in your energy bills.
Your roof must be south facing and at between a 10 and 60 degree angle to be approved for free solar panels.
Savings average at roughly £150 a year for those with solar panelling who use their energy sensibly.
The lower FIT will likely see a drop in installers offering free fittings as the new year comes around. It is predicted that all free schemes will stop completely.
If you opt for free installation, you can find yourself missing out on as much as £570 a year.
Solar panels are much more affordable now, making it possible for many to rely less on the free installation route. Investing in your own panels will see a greater return in the long run.
The approximate cost for investing in your own panels is £5,000.
Pensioners are automatically entitled to free installation, should they want it.