With reductions in the Feed-in-Tariff (FIT), is it still worth investing in solar panels?
If you install solar panels on your property, you can apply to get payments from your energy supplier for generating your own electricity. This is called a ‘feed-in tariff’ (FIT). You can even sell surplus energy to your supplier.
Return on investment under current FIT
Under the old Feed-in Tariff in 2015 households could earn £12-£15k over 20 years, over and above recouping the cost of installation. The old FIT scheme closed on 14 January 2016 with a new scheme opened on 8 February 2016, with different tariff rates and rules – including a limit on the number of installations supported. Recent reductions in the cost of solar installations however, mean that in 2016 a typical return on investment for solar panels is however still around 5% over 20 years.
This could be even greater if, as predicted, electricity costs rise in the future. As solar panels power your home with free electricity, installing solar panels will protect you against rising energy bills.
How will future cuts to FIT impact my return on investment?
To deal with the higher than expected number of households who are looking to install solar panels, the government announced that they would be reducing the Feed-in Tariff (FIT) every quarter and introducing quarterly caps for the number of households able to register for the Feed-in Tariff.
To achieve the best return on investment, install as soon as possible to lock yourself in at the highest possible tariff. Once you are registered on the Feed-in Tariff, you are locked in for the entire 20 years that you will receive payments for regardless of future cuts to the Tariff.
Renewable Heat Initiative (RHI)
The Renewable Heat Initiative is a government-backed scheme which can also help you offset the costs of installing solar panels.
For domestic properties, the payments are made for 7 years and are based on the amount of renewable heat made by your heating system. The money is paid through the Domestic RHI scheme.
The non-domestic Renewable Heat Incentive (RHI) helps businesses, public sector and non-profit organisations meet the cost of installing renewable heat technologies. Payments are made over 20 years and are based on the heat output of your system. The money is paid through the non-domestic Renewable Heat Incentive (RHI) scheme.
Making the Investment Work
The key considerations in making a solar investment work for you are; controlling installation costs, taking the earliest advantage of falling tariff’s, and having a long term view on the investment.
Metrotile’s photovoltaic roof tiles are easy to install, as one tile is one installed Photovoltaic panel. The tiles interlock and are screwed, not nailed, for easy removal should a cell be damaged. There are no special flashings or mounting systems and no other waterproofing or sealing materials are required allowing for a simple and quick installation.
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