Installing Solar Panels? The Time to Act Is Now!

If you’ve been considering installing solar panels on your roof, it’s time to stop dilly-dallying and act. One of the prime homeowner incentives for installing solar pv panels has been the feed-in tariff offered and guaranteed by the UK Department of Energy and Climate Change. At current rates, the feed-in tariff scheme, set at rates guaranteed for 25 years, could generate enough savings/earnings to pay off the cost of your new solar panels and solar system in about 10 years, and generate an additional £15,000 over the next 15 years.

The FITS pays homeowners who install solar panels a fixed amount for every kilowatt hour of electrical power generated by their solar pv system, and an additional small amount for every kw/h or energy sent back to the grid. Currently, the rate stands at 43.3p per kilowatt hour of energy produced and an additional 3p per kw/h for excess energy fed back to the grid. Those rates are set at the time the solar system is certified, and are guaranteed at that rate for 25 years. The rate is also tied to an index so that it will increase with inflation over the years.

As of October 28, 2011, though, DECC has proposed a reduction in the rates paid by FITS, from 43p to 21p per kw/h – a reduction of more than half. At that rate, the payback period for your solar pv system will be closer to 18 years, and the additional return after payback reduced to about £3,800 – still attractive, to be sure, but nowhere near as attractive as the scheme currently stands.

The reduction is scheduled to take effect on systems certified after December 12. Solar pv systems installed and certified before that date will be eligible for the 43.3p scheme. The demand for solar panels and solar energy systems is high, but if you call around to local companies who do solar pv installations, there’s still time to get your system installed and certified before the December 12 cutoff.

If you miss that cutoff, though, there is still ample reason for booking a consultation and solar panels installation as soon as possible. DECC is also proposing new energy efficiency regulations which will go into effect in April 2012. In order to qualify for the FITS after that date, homes will have to meet energy efficiency standards that could add considerably to the cost of your solar pv installation.