The government has announced plans to cut the amount of money people can earn by installing solar panels and tighten eligibility criteria for the feed-in tariff (FIT) scheme.
From April, homes will have to meet a minimum level of energy efficiency in order to qualify for payments for producing energy via solar panels.
Plus, FIT payments will be halved. This will reduce typical earnings for a 3kWp system installed in central England from £27,744 to £14,875 over 25 years.
Although if solar panel prices keep dropping, the ‘net profit’ (FIT payments over 25 years minus system cost) could improve.
Find out more about the feed-in tariff and how it works.
Feed-in tariff changes
The changes include:
- A decrease in the feed-in tariff rate for domestic solar panels
From 1 April the rate will drop from 43.3p/kWh to 21p/kWh. The decrease applies to schemes installed and registered after 3 March.
Find out more about the ongoing legal battle surrounding changes to the feed-in tariff which may affect those who install and registered solar panels between 12 December 2011 and 3 March 2012.
- New energy efficiency criteria
For solar panels installed and registered on or after 1 April, property owners will need to prove their home has a ‘D’ rated Energy Performance Certificate in order to qualify for full FIT payments.
Householders who cannot demonstrate their property meets the energy efficiency requirement will only get 9p/kWh.
The Department for Energy and Climate Change (DECC) estimates around half of properties already achieve a ‘D’ rating. Installing loft insulation or cavity wall insulation will improve a property’s efficiency rating.
- Lower payments for multiple solar installations
FIT payments for individuals or organisations with more than 25 solar installations will drop to 80% of the full FIT rate.
Social housing and community solar schemes may be excluded from this, subject to a DECC consultation.