With all the negative press and best efforts of the Coalition Government to slow up investment in Solar panels because of budget cuts, you could not be blamed for thinking that investing in Solar PV was no longer a good investment for your UK company……….you’d be wrong!
That said even the south of England suffers Solar PV wise from having less sunshine hours per year than the vast majority of mainland Europe, and this Summer has been the worst in this regard for decades. Whilst not the norm, the lack of sunshine might be a negative when UK commercial property owners are considering whether to invest in renewable green energy, despite the fact there is still more than sufficient radiation around even on cloudy days to offer a decent return on investment for their business.
Things have been seemingly made worse by the DECC’s recent announcement that the Solar Feed in Tariff will be reduced yet still further by 3.5% on 1st November 2012 for all new domestic and light commercial installations of up to 50KW.
According to an article by Peter Bennett entitled “November FIT rates revealed” on the Solar Power Portal that was last updated on 28th August 2012 “Installations in the small commercial-scale banding stood at 57.09MW. Although only marginally above the 50MW threshold, this too will enact a 3.5 percent digression to the existing >10-50kW tariff rate (13.5p). As of November the 1, the >10-50kW tariff rate will be 13.03p”
“Installations in the large commercial-scale banding stood at just 13.94MW. As this is less than the stipulated 50MW digression point, the FIT rates for installations >50kW-5MW will remain the same until, at least, February 1. From November 1, the tariff rates will be 11.5p for >50-150kW installations, 11p for >150-250kW installations and 7.1p for >250kW-5MW installations.”
Not content in less than 12 months with having reduced the domestic Solar PV tariff from 43p per Kwh to 16p, from 1st November 2012, this will now be 15.44p per Kwh for any domestic user fitting an installation that is under 4KW. New solar photovoltaic installations of between 4KW and 10KW with eligibility dates on or after 1st November 2012 will get 13.99p per Kwh rather than the 14.5p per Kwh that came into effect on 1st August. As these rates are reduced every three months, there is a possibility that the Feed-in-Tariff will be reduced yet further still on 1st February 2013, and given the trend and this Government’s seeming desire to do all they can to discourage UK business owners from investing in renewable green energy, a further reduction is likely, especially as the guaranteed period has already been slashed from 25 to 20 years!
UK commercial property owners who are not put off by circumstances and who can see the quality timber on offer despite the many trees, can still get a very decent 8-10% R.O.I. from installing Solar PV whilst being able to genuinely strengthen their company’s green credentials. This is because, whilst the Feed-in-Tariff has been slashed beyond belief, so has the cost of installing commercial Solar photovoltaic panels, and the DECC has actually increased the export tariff by 50% since 1st August 2012 so all spare electricity generated will earn businesses more than those companies who paid more for their commercial installations last year.
The net effect is that the return on investment is very similar to any commercial property owner who fitted Solar PV in 2011, so if your business is considering installing a solar panel system up to 50KW, then make sure it does so before 31st October 2012, as you already now know that you will save your company 3.5% by doing so.
