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Last updated: 27 July 2017

Solar Panel Incentives in 2016

How will the future cuts to solar energy subsidies affect you?

UK Government Announces Cuts 

Ever since the introduction of the Feed in Tariff in 2010, homeowners who decided to invest in solar panels have been significantly helped in repaying them by the government. The FiT scheme originally granted 41.3p per kilowatt hour for the electricity produced by domestic solar panels, over a span of 25 years. The payments have been gradually revised, and people who install solar panels today get 12.92p per kWh. However, these cuts have been a consequence of the sharp fall in photovoltaic prices: a pv system that costs £6000 today would have carried a £15000 price tag in 2010. In view of further price drops, the government has announced another review of solar energy subsidies between the end of 2015 and the new year.

Who will be affected by the review?

Even though both homeowners and businesses will be affected, the latter category will suffer the most. The domestic FiT will not disappear and the rates may decrease, but there has been no confirmation of that, hence they will likely remain at current levels. Businesses and farmers who decided to invest in solar farms, however, will be hit the hardest since the government is planning on removing incentives for large schemes (between 1 and 5 megawatts). Experts predict this will have a strong negative impact on investors who were counting on new community solar systems. Already existing community projects will also be affected, since they usually fall into the 1-5 mW range. The cuts have been justified by the need to lower bills by reducing incentives, but might ultimately hurt companies and slow down the switch to renewables.

Is it still worth it to install solar panels?

The future of the FiT is uncertain, but there has been no indication that it will disappear anytime soon. The only change that has been announced so far relates to pre-accreditation rules for developers, meaning that projects will not be guaranteed the benefits from the scheme before they are built, but that will not affect homeowners. However, if you are considering to install solar panels, doing that before the end of the year would be the smartest choice and guarantee the 20-years payments at current rates. People living in the south will get the best savings out of the investment, but solar panels still guarantee a good income and savings to any household in the country.

What if I already have solar panels installed?

If you already have a solar system on your roof, future cuts will not affect you at all. The FiT payments are guaranteed for a period of 20 to 25 years depending on the year of installation.

In other words, the incentives review is bad news for companies and community projects, both existing and in the works, but homeowners shouldn’t worry. Those who already own panels will be completely unaffected, while future buyers might see some small changes.

Read More: Solar Panels in the UK