New Solar Panels Tariff Rates Are Still a Good Deal

Around the country and all over the Internet, new adverts are proclaiming the government’s loss in the matter of the solar panels subsidy. Back in November, the government announced a hurried reduction in the 43.3p per kWh feed-in tariff to 21.1p per kWh and the solar panels industry went into a frenzy of sales and business as homeowners rushed to get their solar PV systems installed before the tariff rate changed.

The solar industry and others with a concern stepped up and challenged the Government’s ruling as illegal, and the courts agreed, calling the decision to reduce the solar PV tariff rate “legally flawed”. Since then, the Government has appealed the court’s ruling to the High Court – and lost, and announced that it will take the appeal to the Supreme Court. The end result is that no one is quite sure of the current rate for the feed-in tariff.

So where do the actual facts lie? And is it worth it anymore to install solar panels on your roof?

Here’s the breakdown for solar PV tariffs as it currently stands.

If you installed solar panels before 1 November, your FiTS payment will be 43.3p per kWh generated by your system, and that rate is guaranteed for the next 25 years. At that rate, your solar panels will likely pay themselves off within 5 to 7 years. Beyond that time, you’ll continue receiving hundreds of pounds annually in FiTS income, in addition to the savings you’ll realize by reducing the amount of electricity you buy from the electric company.

If you install solar panels between now and 1 March, you may receive the 43.3p rate for the next 25 years if the government fails its final appeal. You may receive the 43.3p rate until 1 April and the 21.1p rate going forward from that date, or you may receive the 21.1p rate from the time your solar panels are installed, depending on the agreement reached by the courts. At that rate, your solar panels will have paid back your investment between 10 and 12 years from installation, and you’ll receive a few hundred pounds of income a annually for the remainder of the 25 years in addition to the savings you’ll realized from generating a portion of your own electricity instead of paying for it all. And in either case, the money you receive in FiTS payments is tax-free.

In short, installing solar panels still makes good financial sense, even if you only get the lower subsidy. It will simply take longer to repay your investment and your profit will be less – but it will still be quite a decent return on your investment. The only real difference is that if you install and register your solar panels now, before the 3 March deadline, you’ll have a chance at getting the higher rate on the FiTS, at least temporarily. Even at the very worst case scenario, you’ll earn a decent return on your investment.