Hugo House, head of business development at Good Energy, writes how the Government’s controversial move to cut funding for the Feed-in Tariff scheme will affect the solar industry.
The government’s Feed-in Tariff (FiT), an initiative to provide financial rewards to small, independent renewable electricity generators, has been a huge success. Good Energy now supports 7,000 households and small businesses all over the country generating their own electricity. These small producers are the ‘mini power stations’ of the future.
The FiT has recently been high on the media agenda due to the government consultation announced last week. A reduction in the subsidy was expected in line with falling costs in solar panel installations and a cap on funding.
But in a controversial move which surprised the industry, the government announced that from April 1st 2012, the current FiT level for solar PV installations below 250kW will not be paid for any projects registered after December 12th 2011.
Those registered after that date will receive a new, lower-level of support from April 1st. For domestic-size schemes, it is proposed to reduce payments from up to 43.3p per unit to 21p for sites of 4kW or below (the size of a large domestic solar PV system).
So what to do now for people keen to reduce their carbon footprint and generate their own electricity? Firstly, those already registered for the FiT will not be affected by the change and will continue to receive existing rates, index-linked and guaranteed for 25 years.
If you have a solar PV project underway but not yet completed and registered, you will need to do so by December 11th. According to the Department of Energy and Climate Change (DECC), this means a project must be commissioned (in working order) and have had its request for accreditation received by a Feed-in Tariff licensee, such as Good Energy, for schemes up to 50kW.
So the message for those already in the process of installing solar PV is make sure your paperwork reaches your FiT licensee by December 12th. Any installation whose application is received by Good Energy after midnight on December 11th 2011 will be subject to the lower rate of FiT from April 1st 2012 onwards.
As a champion of small independent electricity producers, Good Energy will provide efficient, expert support throughout the process. The company has the systems in place to process applications as quickly as possible so long as the applicant meets the new December deadline.
If you have not yet accepted a quote, now is a great time to be researching the options and making sure you make the right decision on renewable generation. Costs for solar panels have fallen sharply in the last year, and are expected to continue falling. After the deadline of December 12th, it may well become a ‘buyers’ market’ as consumer interest in installing solar PV falls sharply.
For those committed to reducing their carbon footprint, solar PV still represents a sensible investment. Even under the proposed new FiT rates, the average family household (a three bedroom domestic property) who installed a 2.5kWp solar PV after December 11th 2011 could earn an income of almost £500 from the FiT.
They could also save up to £150 per year in electricity bills, depending on the pattern of their energy usage. As long as the UK continues to rely on imported energy, electricity bills are expected to keep rising. Micro-generation will still provide some shelter from price rises.
Will Hitchcock (pictured) from Suffolk, renovated his family’s Victorian cottage, introducing energy efficiency improvements and a 2.7 kWp solar PV system.
“We’re now into our second year of generating our own electricity using solar PV”, Hitchcock said. “The output has exceeded our expectations for both years and we’ve been really pleased with it so far.”
Good Energy customers who have installed their own solar PV (the ‘mini power stations’ of the future) report a drop in domestic energy consumption from a combination of learning the best way to use their own electricity and increasing energy efficiency. Nearly one quarter claim to have cut consumption by more than 20%.
“It’s been interesting to see how generating my own electricity has resulted in changes to my routine”, Martin Stott, a solar generator from Oxford, said.
“Before having solar PV, I used to put the washing machine on in the evening and run the dishwasher at the same time. Now I run them in the morning when the solar panels are working. Because the energy is yours, you take more ownership over it.”
To find out more about renewable energy and the Feed in Tariff, click here.