According to a survey by uSwitch.com, many consumers are confused about solar energy when it comes to the feed in tariff. That’s hardly a surprise since the government keeps changing it, meaning calculations have to keep changing. If you would like a detailed evaluation of the practical and financial possibilities of getting a solar panel installation, then feel free to call Solar Energies UK on our freephone number for free advice. We’ll go over the basics here though.
How the Feed in Tariff Works
The idea behind the feed in tariff is to find a financial incentive for people to get solar panel solar installations. It is a government scheme intended to boost solar energy UK production, in order to reduce the amount of carbon which the country is responsible for emitting. This scheme is in operation in a number of other European countries as well.
Before bringing in the feed in tariff there was a fund providing solar grants to people who wanted to get a solar panel installation, but the problem with that was that while it reduced the cost of the installation slightly, it did nothing about the relatively poor financial return you got when the panels were up and running. The feed in tariff is designed to help by providing a continuing boost to the financial return on your investment.
While there is are no centrally funded solar grants anymore then (although the cost of an installation has come down significantly in the last couple of years) with the feed in tariff you are paid for every unit of energy which your solar panels produce. That’s whether you use the energy or not. The energy you don’t end up using is exported back on to the national grid and you get paid extra for that. This rate is linked with inflation so will continue to rise each year as long as inflation is increasing.
Feed in Tariff Reductions
When we talk about the rate of the feed in tariff then, what is meant is the amount that you will be paid for each unit of energy which your solar panels produce. It started off at a maximum rate of about 43p, but at the end of last year was cut in half to just 21p. Recently further to 16p and there is already talk of that being reduced further. The amount of time that the scheme runs for has also been reduced from 25 years to 20 years.
The reason for the reductions is that the scheme has been too successful, it has led to a boom in the solar energy UK market, with the total amount of energy produced in the UK from solar panels increasing by 3% last year. Since the government’s fund is limited, it has to reduce the rate so as to avoid running out of money.
Is it Still Worth It?
Whether it is still worth your getting a solar panel installation or not is going to be dependent on your personal circumstances and the kind of return that you demand. Just because the rate is being reduced, however, does not necessarily mean that solar energy is not worth the investment anymore. The cost of a solar panel installation has been reduced, as noted, so the cost is lower than it used to be. Also, the cost of energy has increased and continues to increase, so the savings will also increase over time. Plus you have the added psychological benefit of knowing that you are helping the environment by cutting carbon emissions (only you can put a value on this, of course).
Solar Energies UK
With the terms of the feed in tariff being changed regularly by the government, it is easy to get confused about it all. We hope this article has helped to explain what is happening somewhat, but if you would like more detailed advice on whether a solar panel installation would be advantageous to you, get in touch with us on our freephone number and we will be happy to give you expert advice for free.