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Solar PV FiT subsidy changes - Fact not Fiction

DATE: 03/09/2015

You may have read one of the numerous speculative articles relating to changes in the FiT subsidy, the following are the correct facts for systems connected to or on buildings:

  1. New systems of 50kw (200 panels) or under, installed on or after 1st October 2015 will see a slightly reduced FiT rate by 3.5%.

    For a typical 50kw installation completed between October 1st and December 31st 2015 generating 45,000 kwh, where 50% of the electricity generated is used on site and electricity costs are 11.5p per unit, the impact on returns and savings is a reduction of just £184 from £8,948pa to £8,764 pa. A typical change in ROI from 17.0% to 16.6%.

    For smaller systems the effect is less. It’s nice to have that little extra, but the true effect is relatively small and the hard sell push by other installers to get it in on time with them, may not necessarily be the right choice.
  2. Systems between 50kw (200 panels) and 250kw (1,000 panels) – there is no reduction on 1st October. We are still seeing ROI’s of 15% to 20% for these projects.
  3. The next definite date for further possible reductions is for systems installed after 1st January 2016. It is not yet known for certain what size systems will be affected and by how much.
  4. It is true that the government have published a consultation document to review the Solar PV subsidy system to ensure they do not exceed the budget in 2020. The suggested changes are proposed to take effect on January 1st 2016. This will not affect any installations completed by December 31st 2015. The Government have firmly stated they want feedback on the proposals from the industry as it recognises the Environmental, Economic and Social benefit the industry brings to the country. The industry is launching a major campaign to raise public awareness about the facts and will challenge the figures issued in the proposal to ensure the industry survives and offers a good value energy solution to businesses for the long term future.

    For a typical 50kw installation with the same output and assumptions as in 1 above and completed between January 1st and March 31st 2016, the expected returns and savings are still £5,339 pa providing a ROI of 10.1% and a sub 10 year pay back. This assumes the proposed new FiT rates which are under consultation and which may still be changed.
  5. For exceptional returns get in touch with us now to install before the end of the year, if you wait all is not lost and very good returns can still be achieved.

Ben Harrison, Mypower