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Solar Panel Installations Drop

Since the beginning of August the number of solar panels being installed throughout the UK has fallen, possibly as a result of the Government’s cut in subsidy rates.

Figures produced last week showed a huge increase in applications by homeowners to have solar panels installed to beat the 1 August deadline but this was followed by a significant drop.

When compared with the same period in 2011, there has been almost a three quarters reduction in capacity installed in the last 6 weeks in relation to the feed in tariff scheme that is designed to remunerate homeowners for producing green energy. On average there was 2,872 kW of solar panelling installed below the 4kW size in the last 6 weeks compared to 10,789 kW in the comparable period in 2011.

The solar industry is still of the opinion that solar panels represent a good financial investment with returns of about 10% per annum still being achievable but there is concern that the message that the cost of installing solar panels has come down is not getting through to consumers.

Paul Barwell who is the Solar Trade Association’s Chief Executive stated: “The returns are certainly still there [despite the tariff cuts] because the costs have continued to come down. While a 4kW system has dropped in cost from around £9,000 in April to £7,500 now, tariff drops are a problem for consumers because that’s what they see. August is generally a poor installation month anyway because people are away from their homes.”

He made a prediction that he would not expect to see such a huge drop in November when the next cut of 0.5 pence comes in as it is considerably lower than the drop of 5 pence seen in August.

In addition, in August, the payment period was reduced by 5 years to 20 years although, on the positive side, there was a rise to 4.5 pence (was 3.2 pence) per kWh of energy that is exported over to the National Grid.

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