The return that people who have solar panels installed in their homes receive as Feed in Tariffs could be about to be cut by over half if a proposal by the government is accepted.
It would mean that the payments that homeowners receive for the electricity generated by their solar panels would drop from 43.3p per kWh to 21p. This means an average drop in annual income from £1100 to £55 and also means that the amount of time it takes for solar panels to become cost effective increses from 10 years to a possible 18 years.
The proposal would only apply to people who have solar panels installed after 12th December.
Greg Barker, Climate Change and Energy Minister, said ‘My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn’t fall victim to boom and bust.
‘The plummeting costs of solar mean we’ve got no option but to act so that we stay within budget and not threaten the whole viability of the FITs scheme.
‘Although I fully realise that adjusting to the new lower tariffs will be a big challenge for many firms, it won’t come as a surprise to many in the solar industry who’ve themselves acknowledged the big fall in costs and the big increase in their rate of return over the past year.’
There is more information available on the Energy Saving Trust website.