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Solar panel Feed-in Tariff deadline looms

Posted by Duncan McCombie on 5 December 2018 at 5:15 pm

Homeowners considering switching to solar panel systems should do it now before a cut-off point next year that could strip the opportunity for large financial incentives.

For a long time, the solar technology available to the public for turning sunlight into electricity was beyond the financial reach of many households. A survey conducted by energy efficiency experts YES Energy Solutions found that 55% of homeowners had not invested in solar panels because they believed it was too expensive.

However due to falling costs, improved technology, Government incentives and greater competition between manufacturers, solar panels have become more affordable. Currently, under the Government’s Feed-in Tariff scheme, you receive payment for any electricity you produce as well as any surplus electricity that you transfer back to the grid (deemed to be 50%).

The latest figures from Ofgem state that as of October 2018, for each kWh you generate you get 3.86p, while for each kWh you export you receive 5.24p. The total amount you earn depends on your location and how much electricity you use. According to the MoneySavingExpert, in London, the estimated average savings per year came to £340. In Manchester the figure was £305.

However, the Government has confirmed that from April 2019 it will axe the payments for generating electricity. It has also proposed ending payments for exporting electricity. This means that after the cut-off point, the only benefit to having solar panels will be the electricity savings, as the opportunity to make additional payments through the scheme will be missed.

Without the large financial incentives, it would take an estimated 70 years to recoup the initial investment, which is nearly three times the lifespan of some solar panels. Crucially, those who have purchased their solar panels before this point will not be affected and can still earn back their investment within 20 years.

According to the latest research, the average cost to install solar PV panels in the UK has fallen by more than 60% since 2010, dropping from £20,000 to around £6,000 in 2017. The challenge facing manufacturers now is how to increase the efficiency of solar PV panels while keeping costs down.

Innovations in technology, such as batteries to store solar energy for later use and improvements to the light-absorbing materials used on panels, continue to increase the economic viability of solar PV for homeowners and power grids alike.

Increasing market competition and advancements in hardware are also brining the cost of batteries down, meaning the next step to self-sufficiency is becoming more cost effective.

 

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About the author:

Duncan McCombie, Chief Executive of YES Energy Solutions, has extensive experience in the utility and energy efficiency sector.

YES Energy Solutions is an award-winning Community Interest Company with a strong social purpose – to improve ‘quality of life’ by reducing CO2 and alleviating fuel poverty.

Before joining YES, Duncan gained experience working across the utility sector with freelance or permanent roles across: Energy Saving Trust, Thames Water, Energy & Utility Skills and Consumer Council for Water.”

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

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Comments

2 comments - read them below or add one

H2ecO Ltd

H2ecO LtdComment left on: 12 December 2018 at 11:52 am

The Feed in Tariffs are indeed being formally closed at the end of March with a possible closing of export tariffs as well.

What hasn't made it into any media that I have seen is that customers installing before that date could still be ineligible to claim FIT payments because of the less well known quarterly deployment caps.

This is part of the FIT system that allows for a certain amount of PV to be installed within a quarter. If that cap is exceeded, systems installed within the quarter but after the cap has been reached are "rolled over" into the next quarter. After calling 2 FIT processors who both gave me wrong information, I went to OFGEM direct who gave me a link to a FAQ sheet that I haven't seen published anywhere in our trade media.

As the FIT system is closing fully at the end of MArch 2019, there will be no system to roll applications over into.

This creates an awful situation for installers - of which we are one - where we could in theory install a system on one day and it is eligible but by the time the customer gets their MCS certificate and tries to register, even later that day, the deployment cap could have been breached and the system is ineligible. This could happen anytime before the end of March.

Historically the deployment caps haven't been reached so this hasn't been an issue bt for those of us who have been around for a while in the industry, we know what a FIT rush can do to installation volumes - so this is a possibility.

REAL have issued no guidance on how this should be covered by installers and I can see the possibility for a nasty rush of mis-selling claims if this happens. Albeit this time that most installers don't know this could happen.

If you are thinking about installing a system I'd recommend not leaving it til March.

 

 

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Kiwi-ET

Kiwi-ETComment left on: 6 December 2018 at 5:37 pm

If you know you are exporting more than 50% as we are then you can argue for an export meter and supply that reading. If you have a smart meter, that data is possibly already being collected on the meter but not being sent anywhere. Find out what you are importing. At this time of year, it will be less than 50% of what is generated but over the summer unless you are home all day using high drain electrical devices, you are likely exporting 90% of what you generate. The overall result for a year is possible around 60-70% export.

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