Feed-in Tariff Update

Since our last blog on this subject, a High Court judge ruled that the proposal to reduce the Feed-in Tariff with effect from the 12th December was unlawful. DECC (Department of Energy and Climate change) lodged grounds for appeal against this ruling on the 4th January but last week (Friday 13th) the Appeal Court failed to reach a decision on whether the Appeal would be granted saying that they hoped to give their decision by early February. In the meantime, home owners and businesses are left wondering what tariff they would receive if they installed a system now. As a result, many are holding back on making a decision and understandably so as people want to know what return they will receive for their investment. It’s frustrating for our customers and frustrating for us as an installer, particularly as we know that the new tariff still offers a viable investment opportunity.

The bottom line is that the minimum guaranteed tariff a customer would receive for a system up to 4kWp installed now is 21p. We priced a 4kWp Solar PV system in Bedford this week at £9000. On the right roof, this system would deliver more than 10% return on investment on the 21p tariff. And this is worst case scenario. There is a slight chance that a system installed now would receive the 43.3p tariff if DECC loses its appeal which would just make it a fantastic deal. But installing a Solar PV system gets a little more complicated from 1st April if the rest of the Government’s proposal remains unchanged.

From 1st April, residential homes will need to achieve a ‘C’ energy rating in order to qualify for a Feed-in Tariff. The longer people delay their decision, the more lilkely it is that they could miss out on what is currently the best deal they will ever get for Solar PV.  Our message to anyone thinking about having a Solar PV system in Bedford, Milton Keynes or surrounding areas is that if you are happy with the offer at 21p tariff, act now!  It might end up better but the chance of this happening is reducing the longer the court proceedings drag on and we don’t want people to miss out before the next deadline of 31st March.  Book now to avoid disappointment again.

Change in Feed-in Tariff for Solar PV

On 31st October 2011 the Department of Energy and Climate Change (DECC) announced a fast-track review of Feed-in Tariffs for domestic Solar PV systems. In short the proposal is to reduce the tariff for systems up to 4kWp to 21p and this change will affect any new installation from 12th December onwards. At first reading it was both a shock and a disappointment … is this the beginning of the end for what was a rapidly growing market? We don’t think so! In reality, the price of PV components has come down significantly since we joined the industry 18 months ago and Feed-in Tariff’s should probably have been on some sort of regular review programme linked to capital investment. The change effective now simply brings the tariff back in line with installation costs. We hope that this change will stabilise the PV market and create long term, sustainable growth for businesses like ours.

November was a crazy month for installation companies and suppliers alike. It was our busiest month on record as we worked hard to fit in as many installations as possible prior to the deadline, especially for those customers who had already committed to an installation. However, we are hoping that once the dust settles in January, we can get back to a more steady pace of installations! As an industry, we will need to focus on engaging with those customers who want to install Solar PV for the right reasons … generating their own free electrcicity, offsetting the rising costs of energy, doing their bit for the environment. Solar PV is no longer a ‘get-rich-quick’ proposition but the Feed-in Tariff is still an incentive worth having, with payback periods of 10-12 years still possible.

What’s next? ‘Green Deal’…

First School Solar PV Installation

This week marked the first school Solar PV installation for Morgans Electrical at a primary school in North London.
This is an 8.1kW system (45 modules) using Sharp 180W panels. The system is going to generate approx. 6655kWh of electricty per year earning them £2400/yr in feed-in tariff and saving over £650 on their electricity