Despite Reduced Tariffs, Solar Remains Good Investment
The Feed-in Tariff rate which is paid out for rooftop solar is to change at midnight 14th January. Householders who go solar will from that date onwards be eligible for the new rate of 4.39p/kWh which will be paid out from February.
Although technically the Feed-in Tariff system will be paused for three weeks and restarted on 8 February, householders can continue to invest in solar as normal in the interim and will simply have to wait a few weeks before their payments commence.
Whilst lower than what the industry needed, the Government greatly improved on its original proposals for the new solar Feed-in Tariff scheme after a campaign by the Solar Trade Association, businesses and an unprecedented response by the public.
For householders the new rates mean a return on investment of around 5 percent "“ a tax free, inflation linked return, higher than any rates on offer today for savings accounts, where interest rates are at a record low. A competitively priced solar installation is likely to be paid back "“ the breakeven point on the investment "“ in around 13 years and it is possible for householders to improve payback further through intelligent use of their system.
Paul Barwell, CEO of the Solar Trade Association said:
"Let's be clear; solar is still a good investment for householders and an essential investment for the planet. Costs have come down so fast solar is much more affordable today than five years ago "“ around half the price of a new car. There has never been a greater need to go solar because acting on climate change is more urgent than ever. Solar will save on your energy bills, and potentially add value to your home."
The new rates will still be attractive to householders with available funds and an interest in low carbon technology, the environment and home improvements. Canny householders can take steps to improve the payback of their system by maximising their use of power output from the system (for example by using timer functions and running appliances during the day) and by investing in power diverters and even electricity storage. Recent research by Barclays shows home buyers perceive solar as the most attractive technology when buying a new home, adding an estimated £2000 to the value of a home.
The STA is also urging anyone who needs to replace or repair their roof to include solar as the economics of going solar while you are re-roofing are particularly good. Roof replacement schemes are very attractive particularly as a new generation of roof integrated solar panels can replace and blend with traditional slates and tiles.
Solar is a remarkably reliable technology with 98 percent of solar installations working as originally specified when the system was sold.
Anyone installing solar should proceed as recommended by the Renewable Energy Consumer Code (RECC) and advice is freely available on their website (www.recc.org.uk). RECC requires installers to issue a workmanship warranty for each installation valid for a minimum of two years and for this to be insurance-backed, so consumers can continue to have confidence in their installations. To be entitled to Feed-in Tariff payments installers must be Microgeneration Certification Scheme (MCS) certified and members of RECC.
The Solar Trade Association has also published a simple Solar Repair Agreement which member companies of the STA and customers can sign if a repair or maintenance of another company's install is needed.
Paul Barwell continued:
"The changes to the solar feed-in tariff are significant but solar technology is exceptionally reliable and attractive and the solar industry has proved itself to be the best energy sector in the world at bringing down costs and developing innovative products. We know that solar power is the UK's most popular energy technology and we are confident that, while solar may be less financially attractive than previously, we remain on track and determined to deliver a solar revolution that will benefit everybody."
