New Feed-In Tariff Rate

Following the uncertainty throughout January and February regarding the Feed-in Tariff for Solar PV, we can finally see some light at the end of the tunnel and have a clearer picture about the future for Solar PV. This is the last week for installations which may or may not receive the higher rate of tariff (43.3p for up to 4kWp). Systems installed from 3rd March onwards will receive the lower rate of 21p for systems up to 4kWp and as highlighted in our last blog, this still represents a viable investment.

However, it won’t be as simple as it has been to receive a feed-in tariff as from 1st April, homes will need to achieve a ‘D’ rating on and Energy Performance Certificate in order to qualify for the full rate. If this is not achieved, a PV system would only attract a 9p/kWh tariff.

The Energy Performance Certificate (EPC) is a new requirement brought in by the Department of Energy and Climate Change (DECC) to encourage a whole house approach when it comes to energy efficiency measures. So if your home doesn’t have adequate insulation, for example, or an old, inefficient boiler, you may not achieve a ‘D’ rating and would therefore need to sort these issues out before qualifying for a feed-in tariff on a Solar system.

There will of course be many homes that achieve a ‘D’ rating straight away so for them, it’s just a case of having the survey done before proceeding with a Solar PV installation and we will be arranging this for our customers on their behalf.

I must also mention further changes to the Feed-in tariff that are currently under consultation.  The Tariff is set to be reduced again from 1st July to somewhere between 13p-16.5p depending on the capacity of systems installed during March and April.  The prospoal is that tariffs are then reduced by a further 5% in October and 10% every six months thereafter.  Other measures include a new a reduction in the lifetime of the traiff from 25 years to 20 years and possible removal of the index linking to RPI or linking to CPI instead.  We should know the outcome of this second stage of the consultation in April.  Some installers feel this is the end for the UK Solar PV market but I disagree.  My view is that now we can see what’s coming, we can be clear with our customers exactly what Solar PV has to offer them … reduced electricity bills, protection against rising energy costs, a return on investment of 4-5% and the satisfaction of knowing that you are contributing towards a healthier environment.