Following the Government’s decision to reduce the incentive scheme for the feed in tariff that came into effect in April the installation of solar panels has reduced by 54% when comparing the current weekly average with the weekly average of the previous year.
There was a 90% drop in installations in the weeks that immediately followed the subsidy being halved so the number of installations since that severe drop has slightly recovered.
Recently Greg Barker, who is the Energy and Climate Minister, stated that the installation of solar panels on a weekly basis had increased by 50% when compared with this time last year.
However, the Department of Energy and Climate Change have produced figures that give a different picture when solar panel installations are looked at on a weekly average instead of just comparing a week at the end of the month of June with the same week of a year ago. Solar photovoltaic capacity averaging 8.4MW has been added on a weekly basis since April 2012 when the lower tariff was introduced. When compared with the previous 12 months weekly average of 18.2MW that is a 54% reduction.
On 1 April 2012 the rate was reduced from 43p per kilowatt to 21p per kilowatt and is to be cut yet again on 1 August to 16p per kilowatt.
In the future, rates are to be looked at quarterly and will be based upon the numbers of solar panels that have been installed in the last three months.
Leonie Greene who is the head of external affairs at the Solar Trade Association (STA), stated: “We would have liked a longer period for the solar market to recover before further tariff reductions are made. Nevertheless the returns in August will still be attractive and solar will continue to make very good sense for householders – certainly compared to anything you can get in the bank these days.
“The public should not be put off by the regular tariff reductions. Because the technology costs are falling the tariffs need to come down to maintain a sensible rate of return.”
The STA are of the opinion that, after the cut on 1 August, solar panel installations will achieve a return of 9%.
