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Feed-In Tariff rates to be cut (again) from November 1st

 Feed-In Tariffs (FITs) are due to be cut again from November 1st after the latest capacity for solar panel installs was filled. The Feed-in Tariff, the government’s scheme that pays customers for generating their own renewable energy, will be cut from the 1 November. Instead of receiving the current rate of 16 pence for every kilowatt hour produced, owners of solar panels will now get 15.5 pence for systems smaller than four kilowatts and 13 pence for those up to 50 kilowatts. Solar panels with a capacity above 50 kilowatts will not see their rates reduced in this latest round of cuts.

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It’s bad… but not that bad

Although this is a cut to the Feed-Tariff rate, it’s nowhere near as drastic as the one  implemented on August 1st. In that round of cuts, the rate was reduced from 21 pence per kilowatt hour to 16 pence - a fall of 24%. There was outcry from both the industry and customers at the time, as well as green groups who said it would make renewable energy less attractive for householders. The Solar Trade Association (STA) has blamed negative press surrounding the reduced rates for a fall in business.

The government had originally tried to cut the rates prior to August but lost a battle in the high court as there had not been sufficient consultation on the issue. Cuts have been necessary because the FiT scheme was initially more popular than expected and the original budget was allocated quickly.

Paul Barwell, Chief Executive Officer of the STA, said: “Our figures show that solar is a no-brainer investment. “Compared to the returns you can get these days in banks and many other investments, solar provides a very solid and attractive return. “That is particularly the case if you consider energy bills are rising faster than anyone expected.”

The government wants to ensure that more households than it could fund did not sign up to the tariffs. Any household which had solar panels installed while the rate was higher will continue to be paid that amount for excess energy.

Meanwhile those who had their panels installed after August 1st will receive considerably less and installed after November 1st less again. They can however, rest assured that the money paid to them by the government in the form of FITs is tax free.

The Department of Energy & Climate Change has pointed to the fact that solar panels now cost less to install and this is reflected in FIT rates also decreasing.

Mr Barwell said: “Investors in solar power are also helping us to drive an exciting energy revolution, putting power in the hands of everyday people while saving the planet.”

Read full story here.

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