Although solar panels UK have become commonplace recently, the Government’s decision to cut subsidies last year has left the solar industry reeling. After the Government had promised a feed-in-tariff of 43.5p per kilowatt hour, it slashed that tariff down to 21p after the scheme became much too popular to afford.
After the decision to slash the subsidy was challenged in court by major solar panel firms in the UK, the Government lost the decision. However, it will be moving the appeal to Supreme Court so it appears that the future of solar panels UK still hangs in the balance. If that weren’t enough, last week, the Department of Energy and Climate Change announced the possibility of additional cuts on the feed-in-tariff, which could leave the solar panel industry in complete disarray.
Although solar panels cost around £10,000 to install, the Government’s scheme to supply feed-in tariff of 43.5p per kilowatt hour was a strong catalyst in motivating people to purchase and set up solar panels on their homes. The money spent was returned with the amount of power generated and residents had the option to sell the surplus power to the National Grid for another 3.1p per kilowatt hour. Obviously, such phenomenal rates of return sat well with most citizens, as the Energy Saving Trust (EST) points out. According to the EST, with the previous arrangement in effect, a typical household could stand to save around £1200 annually on electricity bills.
However, with the government’s unpopular decision to slash subsidies, the future of solar panels UK is now highly uncertain. People who installed the solar panels before December 12th of last year would still stand to receive the 43.5p tariff as promised. Those who installed solar panels afterwards will have to make do with the modified 21p arrangement.
If the government does lose the case in front of the Supreme Court, those who have installed solar panels before March 3rd will also receive 43.5p feed-in tariffs. However, as it takes six weeks on average to install solar panels, it is virtually pointless to install solar panels now if you want to avail the higher feed-in tariff.
According to the Energy Saving Trust (ETS), if the Government manages to win the case, householders could get a rate of return around 4.5pc on a tariff plan of 21p per kilowatt hour. However, in case of relocation, solar panels could cause a problem. Along with that, there is also the matter of cleaning and maintenance of solar panels UK.
However, there are bigger problems for the solar industry lying in store. According to the Department for Energy and Climate Change (DECC), the subsidies may be reduced to 13.6p per kilowatt, even lower than the currently projected rate of 21p. This would be catastrophic for the fledgling solar market.
A representative for the Government has explained its decision to cut the feed-in tariff by stating that the slated £1 billion budget for the scheme had already been exceeded by 70 per cent.
