Subsidy Changes to Solar Panels: What Homeowners Need to Know

The UK government has announced that it plans to make drastic changes to the renewable energy subsidy scheme for solar panel owners

In August 2015, the government announced plans to reduce the Feed-in Tariff (FIT) by close to 90%. The FIT is a subsidy that pays homeowners and businesses for each unit of renewable energy which they generate. Currently the FIT means that the average solar panel system pays out £495 a year. When the cut is enacted in January 2016, all new homeowners who install solar panels will receive less – just £64 a year according to the Energy Saving Trust.

Why has the government made these changes?

The government’s official argument is that these cuts will lead to savings of £6 on the average homeowner’s energy bill. Amber Rudd, energy secretary, has said that the “overall cost of the scheme to the wider public has exceeded expectations, while the price of solar installations has fallen spectacularly.”

The Huffington Post agrees on that last point, telling readers that “since 2008, the global cost of installing solar panels has actually fallen by as much as 80 per cent, and contractors have made big strides in operating more cheaply and efficiently.”

The changes have been criticised by environmental groups and big businesses alike. Friends of the Earth say that the changes to the subsidy will cost the UK 20,000 jobs, and Panasonic, a normally quiet company, has urged the government to “ help (the solar industry) further develop to become fully independent from state support, with energy storage and a closer involvement of utilities. But let’s not push the bird out of the nest before it can properly fly.”

What does this mean for those who already have solar panels installed?

Those that already have solar panels installed will continue to receive payments at the original rate. The contract that a homeowner makes with the government when installing solar panels is binding, and cannot be affected by later changes to the FIT rate. This means that lucky individuals who already have solar panels installed will continue to benefit for years to come.

What does this mean for those thinking about getting solar panels?

It’s not too late to benefit from the current FIT levels. If you get solar panels installed before January 2016, then you’ll qualify for the current rate of payment for the next 20 – 25 years, which adds up to £8,750 in FIT payments alone. That’s not to mention the substantial savings you’ll make on your energy bill too.

We shouldn’t forget either the reason for solar panels in the first place. The government website states that: “Innovation in energy technologies is essential if the UK is to meet our challenging future climate change goal of an 80% reduction in greenhouse gas emissions by 2050.

Other renewable energy subsidy schemes have not been targeted by the government. Ground source heat pumps, air source heat pumps and solar water heating systems are covered by a different subsidy, the Renewable Heat Incentive, which still guarantees generous payments of 19.2p per kWh over the next seven years.

Act now to get solar panels installed in Essex before the 2016 deadline. Complete Renewables are the leading solar panel trade suppliers in Essex. We’re also the leading solar heating system installers and expert fitters of ground source heat pumps. For an open and honest explanation of the subsidy changes and what they will mean for you, give us a ring on 01621 827015 today.

Air Source Heat Pump Installation

Details of the Renewable Heat Incentive Announced

For those of you who have been following the progress of the Renewable Heat Incentive (RHI), it’s a tale of ups and downs. We’d all hoped that the scheme would get the industry going much in the same way as the Feed-in Tariff did for solar panels – although we’re keen to see a better long-term plan than was the case for solar.

However up until now we haven’t really had much to get excited about. Delay after delay has a very detrimental effect on an industry. Especially as plenty of customers are putting off installations to see what they will actually be entitled to.

So How Do The Figures Look?

Well the good news is that this week we had an official announcement and a nice set of figures to get excited about. Air source heat pumps will be paid at 7.3p per kWh, ground source at 18.8p per kWh and solar thermal at least 19.2p per kWh hour. The amount of energy installers will be paid for will be based on the renewable energy their household generates. So the performance coefficients are important here; if a heat pump has coefficient of 3.5 it will generate 3.5 units of renewable energy for each unit of electricity it uses. The 3.5 units will be entitled to payments, and the 1 unit of electricity will be discounted.

What about dual heating systems?

The good news is that households who have maintained an existing heating system or installed one in addition (which is not renewable), will still be able to claim the RHI. They will however need to install a meter to ensure that they are only paid for the renewable energy they generate

So Not All Households Will Need A Meter?

If you’re not willing to, or don’t have the space, to install a meter you don’t have to. Estimated figures will be taken from your EPC and green deal assessment to workout how much renewable energy you will generate. If you are interested in installing a meter to get a more accurate payment, you can do this. Plus you’ll receive an additional payment of up to £230.

So The Future Looks Good For Renewables

At Complete Renewables we’re really excited about the RHI. We believe that it will be the boost needed to get the industry going. Heat pumps represent excellent value for money and can save households hundreds, often more, per year. Even without an incentive they are an excellent option for households looking to reduce their spend on energy. With this additional boost heat pumps will surely come to the straight to the front of the queue when it comes to replacing older less efficient technologies.

More information

If you’d like more information on our air source heat pumps, click here. For more information on ground source heat pumps, click here

The full details of the RHI can be found on the Government’s website here