Most people are aware of the proposed change to the FiTS rate, dropping the tariff from 43.3p to 21p per kWh beginning with 1 April. Another part of the proposed changes is receiving much less notice, but will also affect those who install solar panels with the intent of cashing in on the tariff scheme. In addition to the tariff reduction, the government has placed two alternate proposals of new requirements for homeowners to meet in order to qualify to receive payments through the FiTS.
Both proposals have to do with increasing the energy efficiency of the properties on which the solar PV system is installed. Increasing the energy efficiency of the properties helps reduce the use of electricity in the home, which will help reduce the running costs of the feed-in tariff scheme over the long run. It also helps promote the overall goal of reducing UK carbon emissions and reliance on carbon-based fossil fuels.
The two alternate proposals as laid before Parliament for consideration apply to solar panels installed in homes after 2 March 2012. In order to qualify for the 21p tariff rate as of 1 April 2012, the property owner or occupier may be required to meet one of the two following conditions:
The owner or occupier must bring the property up to an Energy Performance Certificate rating of C or above.
The owner or occupier must undertake any measures identified on an EPC that are eligible for Green Deal financing and will require no additional financing.
Compliance with the proposed new energy efficiency guidelines mean that it will likely cost more to become eligible for FiTS payments, but the required improvements are also likely to increase energy savings, including electricity costs. Installing cavity insulation, for example, typically costs less than £500, but can save you about £400 annually, providing a rather impressive return on your investment. When coupled with the average electricity savings realized with solar panels – up to £190 annually – the additional energy saving measures will only quicken the rate of return on your investment in solar PV.
These figures are based on the average returns projected by the Department of Energy and Climate Control. Your rate of return for solar panels will depend upon a number of factors, including your geographic location, the amount you currently pay for electricity and your typical patterns of electrical usage. DECC estimates that many properties in the UK can generate up to 50 percent or more of their electrical energy from a solar PV system. A local solar panels installer can provide you with more personally tailored information to help you make your decision about whether solar PV makes sense for your home.
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