Solar feed-in tariff changes announcedHomes must meet energy efficiency criteria

09 February 2012

Solar panel on roof of house

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.

More on this…