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EnergyLink Seeks Brighter Side Of FiT Changes
Proposed cuts to feed-in tariffs for Solar panels due to come into effect from December 12th, should not stop homeowners from making what remains a shrewd and eco-friendly investment, according to a leading energy efficiency company. The UK Government this week announced proposals to cut the Feed in Tariff level "“ the amount paid to households with Solar panels for the photovoltaic energy they generate "“ by around 50%.
For small-scale domestic systems under 4kWp, this equates to a reduction from 43.3p per kWh to 21p per kWh. Since feed-in tariffs were launched in April last year, Solar panels have proved to be incredibly popular in the UK and, at the same time, the technology has become significantly cheaper to manufacture and install. The unprecedented popularity of Solar panels has left the British Government dealing with what it believes is an unsustainable level of Feed in Tariff payments and a consultation is now underway.
Given that Feed in Tariffs are subsidised by all consumers through a green levy being added to energy bills, the Government has acted in order to keep this levy to an acceptable amount. Although Solar panels will become less lucrative an opportunity than they are currently, they will still offer households the chance to make a sound investment which guarantees a strong return on their initial outlay.
According to EnergyLink, Solar PV systems guarantee households free daytime electricity for the life of the Solar Panel system. With energy prices predicted to rise by as much as 10% per year, this helps to compensate for any negative impact the planned Feed in Tariff cut may have. If, as expected, the reduced rates come into force next month, homeowners with a typical 2.5kWp system will still generate £641 per year in earnings and savings for 25 years, allowing them to gain a 6.9% return on investment, paying off their initial expenditure within 14 years and 5 months.
With a larger, 4kWp Solar PV system, households will enjoy a 7.6% return on their initial £13,000 investment, making £984 per year in savings and earnings through photovoltaic energy generation. With most reputable Solar panel installation companies likely to be fully booked for at least the next month and stock shortages beginning to be reported, homeowners have little chance of being able to have a photovoltaic energy system installed before the expected launch of the new rates in December.
However, with Solar PV panels maintaining their status as a risk-free investment and the opportunity to make considerable energy bill savings during and beyond the 25-year Feed in Tariff period, EnergyLink believes UK homeowners should not be put off by the current proposals to reduce Feed in Tariff rates.
