Policy

UK solar sales slump in wake of feed-in tariff cut

Solar photovoltaic sales in the UK slowed down dramatically last month following the government’s cut in feed-in tariffs (FITs).

According to YouGen, an independent website providing information on microgeneration, there is widespread belief that the FIT ended on March 31, despite the fact that the rate is still 21p for systems up to and including 4 kWp.

“The trouble seems to be that people think that the FIT ended on April 1,” says YouGen founder Cathy Debenham. “That is not true. It still gives rates of return that are significantly higher than you’ll get from a bank. And the capital costs of installation have more or less halved, making it accessible to more people.”

However, Debenham is urging consumers to act quickly to install solar panels, or other renewable technologies, as the rates will start to reduce again on July 1.

Solar photovoltaic systems still offer annual returns of around 10%, which is much better than when FITs were first introduced, and can pay for themselves in well under ten years.

From July, the FIT will start to ‘degress’, so that as the cost of systems fall and electricity prices rise, the tariff rate will reduce until it is no longer needed. Further degressions will take place on October 1 and every six months after that.

“There is a two month window of opportunity to still get solar photovoltaic before the rates reduce again,” says Debenham. “It’s not as attractive as it was pre-December 12 last year when the returns were ridiculously high, but it’s still a good insurance against the steadily increasing energy prices.”

Nevertheless, according to the government’s latest figures, as of the first quarter of this year, 1091 MW of renewable capacity was included under the scheme – a 66% increase on the last quarter of 2011.
For further information:
www.yougen.co.uk
www.decc.gov.uk/en/content/cms/consultations/fits_rev_ph2a/fits_rev_ph2a.aspx
www.decc.gov.uk/en/content/cms/statistics/energy_stats/source/fits/fits.aspx

Related stories:
10:10 calls on schools to ‘crowd-source’ funds for solar panels (1-May)
UK government loses Supreme Court case against solar feed-in tariffs (26-Mar)
UK government feed-in tariff reform puts microgeneration at risk (10-Feb)
UK government unveils new plans for feed-in tariffs (9-Feb)

04 May 2012

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