After the spending review at the end of last month, many people were left asking how the newly introduced Feed-In Tariff would be affected. This article discusses what was said in regards to the Feed-In Tariff and what the spending review means for people who are interested in investing in solar PV.
At the end of last month, George Osborne announced the spending cuts that would be made by the Coalition Government in the coming years. For those who work in the solar PV industry, this was of particular interest as we waited to see whether the Feed-In Tariff would be affected.
The answer that came was thankfully no, the current Feed-In Tariff would not be affected. However it was suggested that the existing high levels of tariff may not be around forever.
The Feed-In Tariff was introduced in April 2010 and at present is set at 41.3p per kWh for a solar PV system that is 4kWp or smaller. This tariff is scheduled to have its first review in April 2012, with the first reductions taking effect from April 2013.
Following the spending review, the current tariff level of 41.3p per kWh remains the same, however there were hints that this may be reduced sooner than expected. It was announced that future tariff reviews could be brought forward if there was a 'higher than expected deployment' of solar PV across the UK. What this means is if lots of people rush to install solar panels in the next year then the Government may consider reducing the Feed-In Tariff before its scheduled review in April 2012. As of yet it remains to be seen what figures would constitute a 'higher than expected deployment.'
So what does this mean for people who are thinking of installing solar panels? For those who have already had their solar panels installed, they will not be affected by future reductions. This is because once a solar PV system has been installed and commissioned, it is locked into the tariff level current at that time and guaranteed for 25 years. For those who are thinking about investing in solar panels now, it would be wise to have them installed sooner rather than later in order to benefit from the highest level of tariffs. This is good news for installers, as they now have a very strong argument for encouraging people to install solar panels now!
