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What Do the Changes to Feed-in Tariffs Mean for Me?

As of 15h January, there have been new tariffs introduced by the government to their FITs (Feed-in Tariffs) schemes, which will be applicable for all new applications submitted. Any applications that were received before 14th January will be considered for the old rates, if the application is accepted.

Any applications that are submitted between now and 7th February will be placed into a queue system as the FIT scheme has been paused for this period of time. If you already had a FIT scheme approved before 14th January, then none of these new changes will affect you.

But how will it affect those that are looking to install renewable energy in the foreseeable future? With the new Feed-in Tariffs, you will still receive an amount for each kWh of electricity that is generated, but this will be significantly less than what was previously offered.

Last year, those with solar panels received a subsidised rate of 12.47p per kilowatt hour (kWh) of electricity that was contributed to the National Grid. With the new cuts in place, these rates have been slashed by almost two-thirds, being reduced to 4.77p per kWh. One consolation however is that the initial suggestion was to cut the rates down to just 1.63p per kWh, which would have been a massive reduction of 86.9%.

Why have they made these FIT cuts?

These cuts have been made as the government have argued that the impact of renewable subsidies was going to be detrimental on household energy bills. Nevertheless, they have come across strong opposition to these cuts, with as many as 18,700 workers thought to be losing their jobs due to many installation companies shutting down amidst these cuts.

Should I install Solar Panels now?

With the new subsidy cut and the cap of £100 million that is now in place, the Solar Trade Association have predicted that the number of solar panels installed within the UK will be halved. But, those installations that are taking place are likely to see reduced rates for installation and equipment as technology has advanced so far that the expense of installing has been halved over the last 8 years.

Furthermore, the technological advancements also mean that solar panels are becoming even more efficient, so the costs associated with producing energy through these systems is thought to be falling all the time.

Nevertheless, the reduced tariffs will undoubtedly cause some concern for those considering solar panels in the near future, and it is highly recommended to carry out calculations and thorough research prior.

How can I apply for FIT?

To qualify for the scheme, you will need to ensure you’ve used a qualified installer and once you’ve been given the go-ahead you’ll need to determine what energy supplier you are going to choose. You can opt for the one you are currently with, or you may wish to contact other registered suppliers to see what their services are like.

As well as receiving money for the generation tariff, you can also sell any surplus electricity that is generated. Known as an export tariff, you’ll receive 4.77p per unit of electricity and will only be permitted to sell back half of the units of electricity that your system is generating. If your installation is above 30kW, you will need to have an export meter.

There will be various factors that determine the amount received, including what renewable technology you install, how energy efficient your home is and what size of system you are using.
You are eligible to apply for the Feed-in Tariffs, if you have a peak output of no more than 5MW. This is reduced to 2kW if you are using a combination of heat and power technology. All of the technologies that will be covered within the scheme are detailed below:

Before you submit your application you will need to carry out a home energy check or request for a Green Deal Assessment where a qualified professional will visit your home to check your energy efficiency. Once this has been done, you will then need to obtain an Energy Performance Certificate, which will be used as a way of calculating what rate you will receive from the Feed-in Tariff.

In short, the new government feed-in tariff cuts are not good news for those wanting to look at installing solar panels at their home. But, this is only when comparing with what one would have received prior to these cuts and it cannot detract from the fact that solar power does still provide a very cost-effective and efficient way of producing renewable energy. Furthermore, with the on-going reductions in the technology used to produce solar panels, the time it takes to recover the costs will be lessened over time.

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