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Solar PV: where we stand as consumers in all the chaos

Posted by Cathy Debenham on 17 January 2012 at 9:43 am

The rate of return on solar panels is currently in a state of flux, since the High Court found that proposed changes to the feed-in tariff were 'unlawful'. Now the government is appealing the decision, the uncertainty has been extended.

So what does that mean for someone who wants to buy solar panels?

If you are interested in installing a solar PV system of up to (and including) 4kW this is where you stand:

If you install between now and 31 March you will get at least 21p per kWh you generate from the feed-in tariff. This was confirmed by the Department of Energy and Climate Changed (DECC) in writing to the Solar Trade Association. It said:

“The tariff rate for PV installations less than or equal to 4kW will not fall below 21p for installations with an eligibility date between 12th December 2011 and 31st March 2012”

Depending on the outcome of the government's appeal, you may find yourself in the bonus situation of getting 43p per kWh. However, it would be unwise to bank on it.

In addition to the generation tariff mentioned above, you will also benefit from:

  • 3.1p per kWh exported. In this size installation, the amount exported will be estimated to be half of the electricity you generate.
  • reduced electricity bills, because you will use your own generated power first. How much this is will depend on the proportion of electricity you use during the day, and whether you time your use of energy hungry appliances to when the panels are generating most.

The situation for larger installations is the same, but the rates are different. Click here for rates:

What rate the feed-in tariff rates will be for people with an eligibility date after 31 March 2012 is still unknown, but it's certainly not likely to be more than 21p, and may well be less. A consultation document is expected at the end of January, which may shed some light on the matter.

So if you are happy with the rate of return that 21p per kWh gives then now is a good time to install. It's unlikely to get better, and it's quite likely to go down again after 31 March 2012. You never know, you might win the 43p jackpot, but don't rely on it when making your decision.

Photo: Chelmsford Public Library


If you have a question about anything in the above blog, please ask it in the comments section below.

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7 comments - read them below or add one


banjaxComment left on: 22 January 2012 at 2:46 pm

If the price of wholesale panels is falling?  Would it be possible for a 4KW to go below 5K ?  I would be interested in the opinion of the suppliers of where they believe the "sweet spot" in the price point lies?  

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Fred1Comment left on: 19 January 2012 at 4:52 pm

I see from the latest press release that the cut off date is 3rd March latest.

However, if DECC win the appeal, the cut off date will  still be December last year.

I quess that DECC will be aware that their statement leaves no doubt where they stand, "Spend No More Money"

I believe  Solar is now not sensible, but I hope to stock up on cheap insulation this year, before the green deal starts....



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Cathy Debenham

Cathy DebenhamComment left on: 17 January 2012 at 4:35 pm

As I said it's a good time to install. The industry was expecting the feed-in tariff rates to change on 1 April, and had ordered stock of solar panels accordingly. So when it was announced that the rates would fall earlier than that there were a lot of solar panels in transit on the high seas. As a result there are a lot of offers around now as wholesalers try to shift their stock.

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Sust-itComment left on: 17 January 2012 at 4:17 pm

The price of PV systems seems to be dropping like a stone! Since writing this blog post we've been quoted £7800 for a 4kW PV system!

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David Hunt

David Hunt from Comment left on: 17 January 2012 at 2:11 pm

A very well presented article that explains the situation well. The sad truth is that the government, whilst saying they want to avoid Boom & Bust, but that is exactly what their actions are causing. At present there is a situation that encourages a mass of installations before 31st March. Our take on this is here

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Cathy Debenham

Cathy DebenhamComment left on: 17 January 2012 at 12:18 pm

Martin, that criteria is a) still under consultation, and b) doesn't apply until 1 April 2012, so is an added reason why now is a really good time to get on and install solar PV.

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Martin Fodor

Martin FodorComment left on: 17 January 2012 at 12:08 pm

To make a decision anyone in an older home will also need to know the outcome of the proposed retrofit hurdle that has been imposed as well in the consultation: the achievement of an Energy Performance Certificate of 'C' home energy efficiency. You are supposed to reach this to qualify in future.

This is achievable for newer homes where basic measures can be added (if not already) like cavity wall insulation - these should be a matter of course, anyway, to end heat loss.

But for older 'hard to treat' and hard to heat homes rated F or G currently, like almost all Victorian and Georgian houses - and many others too - this will be a very expensive and perhaps unviable task I believe. Most straightforward measures together will raise performance only 1 or 2 steps - say from F to D at most. In which case forget home generation and don't even expect the £10,500 Green Deal loan from October to solve all your heat loss problems readily as some of the measures will fail its 'Golden Rule' test of saving occupants more than the added interest payments due.

This extra barrier, largely unrelated to home electricity use, means the homes hardest to make more efficient will also I think be the ones where support for what may be more cost effective low carbon energy are ruled out from the official scheme, regardless of the suitability for home generation.

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