What Potential Changes To The Feed-In Tariff Mean For Solar Panel Buyers

As solar panels produce energy more efficiently and become more profitable for homeowners, the government is reducing green subsidies paid to homeowners such as the Feed-In Tariff (FIT). What will these changes mean for homeowners that are thinking about getting solar panels installed?

What is going to happen to the FIT?

The Department of Energy & Climate Change (DECC) is the government body that will review the current subsidy levels and decide if any adjustments need to be made. At the moment, homeowners and solar farms are paid by the government per unit of renewable energy generated. The current plan is to shelve these subsidies for certain categories of solar farms by 2016. Subsidies for homeowners will also be discussed. It is being reported that proposed changes to the subsidy scheme will save as little as 50 pence on the average electricity bill.

Energy and climate change secretary Amber Rudd has justified the review by saying: “we need to keep bills as low as possible for hard-working families and businesses while reducing our emissions in the most cost-effective way… As costs [of solar panels] continue to fall it becomes easier for parts of the renewables industry to survive without subsidies.”

What does this mean for those that are considering solar panels?

The changes are most likely to affect farmers and small businesses that are planning to install large numbers of ground-mounted solar panels to take advantage of the incentive. Many farmers had been hoping that they could keep smaller animals such as chickens and sheep in the same field as solar panels, and in this way not only double the output of their fields, but also protect themselves from price fluctuations. Farmers and small businesses that were planning to install more solar panels will have to re-evaluate the return on investment that solar panels will bring once the incentive is withdrawn. Homeowners may not be affected so badly, as there is a chance that the FIT could remain at the same level after the 2015/2016 review.

Does this mean that now is a bad time to install solar panels?

Actually, it means that now is a great time to install solar panels, so long as you do so quickly. The government’s “impact assessment” will most likely be published at the end of 2015 or at the start of 2016. Solar panels installed before September 30th, and possibly those installed as late as February 2016, will still qualify for the current generous FIT payment for the entirety of their 20 to 25 year lifespan (depending on location). After that, things are less clear. Though FIT payments could stay the same, there could also be cuts. If you want to receive the current level of FIT payments, your best bet is to act as quickly as possible.

Those that already have solar panels installed won’t be affected by the review.

Are solar panels still a good investment for homeowners?

Solar panel installation costs have fallen dramatically in recent years, from £18,000 in 2010 to around £5,500 today. This means that although the FIT payments have also fallen (the returns), so has the cost of installation (the investment). Those that install solar panels before September 30th will receive 12.92 per kWh, provided that their home is certificated at energy performance brand D or higher. Someone with an unobstructed south facing roof that installs a modern solar panel system in Essex for £5,000 can expect a combined income and electricity bill saving of about £600 a year over the guaranteed twenty five year lifespan of a solar panel, amounting to more than double the original outlay.

Talk to our friendly and experienced engineers on 01621 827015 to see how much you could save each year with solar panels in Essex from Complete Renewables.

What Is The Minimum Pricing Policy and How Does It Affect UK Solar Panel Purchases?

The EU protects European solar panel manufacturers by imposing a minimum price on Chinese imports. But by protecting European businesses through artificially raising the price of solar panel installation, is the EU failing to protect the environment?

Thanks to a devalued currency, government subsidies and a much larger-scale manufacturing industry, Chinese manufacturers can export solar panels to the UK at below the European production costs, potentially putting European competitors out of business. To keep European manufacturers competitive, the European Commission implemented punishing tariffs for Chinese exporters in 2013.

Yet allegations that large numbers of Chinese solar panels are still being dumped into European markets at illegal prices have fanned the flames of an already heated debate. With the yuan being devalued by a further 2% recently, the price difference between Chinese solar panels and their European counterparts will become even steeper.

What is the minimum pricing policy for solar panels?

The current rules stipulate that Chinese imports must comply with the minimum import price (MIP). The MIP ramps up the price of imported Chinese solar panels so that they are in line with the costs of solar panels manufactured in Europe. If the MIP weren’t in place, consumers would have access to cheaper solar panels, but European solar panel producers would go out of business.

The policy has been widely criticised for pushing up the price of green energy in Europe, and has been called “unfair protectionism” for European manufacturers. Solar panel installers argue that access to clean energy is so important to homeowners that the MIP should not be extended when it is up for review in December. In contrast, European solar manufacturers in favour of the MIP are set to launch a formal request for the policy to be extended in 2016.

What does this mean for solar panel buyers in the UK?


According to the latest estimates from industry experts, solar panel modules are more expensive in the EU than the global average, largely due to the MIP.

A solar panel that costs £5,333 in the UK might costs as little as £4,000 in the US – a price difference of £1,333. The recent yuan devaluation will increase that difference, given that China manufactured roughly 64% of the world’s solar PV panels last year.

The UK’s Renewable Energy Association (REA) has found that more than 50% of the installation costs of solar panels in the UK are due to the cost of solar panel modules, meaning that scrapping the MIP would considerably lower the price of solar panels for UK consumers.

Consumers tend to think of solar panels as a high-cost product, but what they often fail to realise is that these high prices are at least in part determined by EU policy rather than market forces. REA analyst Lauren Cook says that ending the MIP would help solar panels to be cost-effective even without government subsidies. She added that to deliver lower cost green energy, the MIP must not be extended past December of this year.

Those that are concerned about the environmental impact of producing a solar panel in China and shipping it all the way to England before installation should take heart though. A recent report reveals that a solar panel ‘pays back’ the energy and material cost of transportation and installation in just four years, then continues to produce clean energy for a further two decades.

At Complete Renewables, we specialise in the installation of LG solar panels because of their outstanding durability and incredible 25 year warranty. This guarantees that your solar panels will be generating at least 80.2% power output by the end of the 25th year. Learn more about the LG panels we install today!