Solar PV weathers the government’s Feed-in Tariff cuts

The recent announcement that the government are slashing their Feed-in Tariff scheme by more than 50% in December sent initial shockwaves through the Solar industry, but what do the cuts actually mean for customers interested in installing the technology?

Richard Jones, Regional Director of Lincolnshire renewable energy company, EnergyMyWay explains why the future is still bright for Solar PV.

?The cuts to the Feed-in Tariff rates are absolutely necessary because the return on investment for homeowners had crept up so high that the market was turning into a bonanza and cash back subsidies were becoming unsustainable. The demand for the technology has driven the price of solar panels right down since the tariff was launched in April 2010, so it makes sense for the tariff rates to come down too, but even at the new rates, Solar PV remains an attractive investment for homeowners.?

The Feed-in Tariff was introduced to encourage homeowners to install Solar PV and contribute to the UK?s carbon emissions commitment. Property owners are rewarded with an income for every unit of electricity they generate from their Solar array. Rates were at their highest levels by Autumn 2011 at 43.3p per KWh of electricity from a domestic Solar PV system. As of 12th December 2011 this will be reduced to 21p per KWp.

?This may seem like a drastic cut, but panel prices continue to decline and property owners are still looking at a potential return of 8-10% on their investment which is more or less what the returns were looking like when the tariff was launched in April 2010. With the continued rise of electricity prices pointing consumers to renewable alternatives, Solar PV is still an attractive financial proposition and will continue to play a very important part in the future of domestic energy.?

If you would like a free survey of your property to understand the benefits of introducing renewable technologies, such as Solar PV, please contact EnergyMyWay


James Eades

By: James Eades

Operations Director, James Eades is EnergyMyWay's in-house expert on renewable energy policy, microgeneration technologies and best practice in the renewable energy industry.