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How do government changes to subsidies affect those considering solar?

DECC announces planned cuts to Solar Farm subsidies

The Department of Energy and Climate Change (DECC) today revealed its consultation seeking to remove all Renewable Obligation (RO) support for Solar Farms from 1st April 2016. This has come after weeks of speculation and rumours of a “big reset” following an over-allocation of renewable subsidies.

While the announcement presents a major threat to the future of solar farms, we would like to offer some reassurance and advice to anyone considering installing solar panels for their home or business premises.

What sort of solar installations will be affected by today’s announcement?

Today’s announcement sets out to cut subsidy support for solar farms.The RO subsidies have driven the widespread deployment of large, field-based solar arrays across the UK, which now account for over 50% of the UK’s solar capacity. Currently solar farms under 5MW can claim support from Renewable Obligations but the consultation sets to bring an end to the subsidy from April 2016.

Are subsidies still available for domestic or commercial solar arrays?

Under the Feed-in Tariff scheme, homeowners and businesses are still able to claim financial support for solar panel installations. The scheme is designed to pay you for every unit of electricity your solar panels generate, with index-linked payments guaranteed for 20 years.

The Feed-in Tariff is designed to encourage the use of solar energy by offering generous returns alongside the cheaper electricity bills provided for homes and businesses.

Will the government be removing the Feed-in Tariff?

DECC has confirmed that the Feed-in Tariff is facing ‘cost control measures’ as part of the wider review, but has not given a timeline for any announcement, but will provide “more detail later in the summer.”

Is now a good time to install solar panels?

Our advice to anyone considering solar panel is ‘don’t wait any longer, or you may lose out’. The Feed-in Tariff is under review and we anticipate there will be a change to the current subsidy structure, so now is the time to take advantage of the tax-free Feed-in Tariff payments and to get the greatest returns from your investment.

Is there expected to be a rush on solar panels before any changes?

This will depend on how the government controls any planned changes to the current subsidies. As there is some uncertainty around the new government’s plans for solar, our advice is to start talking to us as soon as you can to ensure you get the solar panels you want at the time you want them and for the greatest financial returns.

For more information or to arrange a survey, please call 0845 371 3181 or find your nearest 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.