New 16p Feed-in Tariffs deadline extended until August 2012

by Sara Pernas

Last week the Government announced their decision to postpone the new Feed-in Tariffs cut, confirming that the cuts to solar incentives will happen in August 2012, a month later than originally planned.

From 1st of August, the new Feed-in Tariffs will drop from 21p/kWh to 16p/kWh, and will continue going down every three months, depending on the market. On the contrary, the Export Tariff will be increased, going from 3.2p to 4.5p per kW hour.

The Government defends these cuts have to be done to reflect the lower costs of installing solar panels, and maintains that new FITs will give a return of the 6% for a typical solar panels installation. Climate Minister Greg Barker said  “the sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector”, providing the industry with ‘transparency, longevity and certainty.’

“After a year and a half of crippling uncertainty, the sun is starting to shine again on the solar industry” said Friends of the Earth’s executive director Andy Atkins.

Homeowners who install solar panels from 1st August will get:

  • 4.5p for each kW per hour exported to the National grid
  • 16p for each kW generated per hour
  • The tariff paid for 20 years – instead of the 25 years payment that is being made now.
  • FiTs will continue to increase with inflation (RPI), and will also fall every three months depending on the market.

Consumers who already receive a FIT will see no changes in their payments, as they registered their solar panels installation before that date.

Is that good news?

Although Feed-in Tariffs are going down and will continue doing it, the truth is that solar systems installations prices have dropped too, so solar panels owners will keep on making profit. In addition, Export Tariffs will be increased from 3.2p/kWh to 4.5p/kWh, increasing the revenue of homeowners.

By the way, to those who are thinking about giving solar energy a chance, there is still two months left to install solar panels and receive around a 10% return on investment during the next 25 years before the new 16p Feed-in Tariff starts.

Related Links

New feed-in-tariffs regulations from 1st April 2012

Four trade associations united to defend UK Solar

How the UK Feed In Tariffs Work – Video

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