Worried your company may have missed the boat commercially Solar PV wise now the Feed-in-Tariff has been slashed? Don’t be, as the overall equation is not much different than in 2011. In spite of all the seeming back-tracking by the Coalition Government and their constant changes to the Feed-in-Tariff it still worth you installing Solar panels to your commercial UK property. This is because the case for Solar photovoltaic solar panels remains a very strong, at least until 31st October 2012 (and maybe for longer).
There are four main reasons for this. Firstly, the cost of commercial installations has dropped in the last 9-12 months by almost 50%, so you need to cough up less investment to fit solar panels and inverters. Secondly, the export tariff has increased by 50% in your favour, thirdly the cost of energy bills continues to rise and fourthly, the net result is that an R.O.I. of 8-10% is achievable (the same as about a year ago!) despite the guaranteed FIT period being cut by 20% by the Government on 1st August 2012.
However, it is always worth doing your own research, as well as crunching the numbers, for there may come a point in the not too distant future when the Government will make the Feed in Tariffs so unattractive that a decent return on investment is not possible. According to the Energy Saving Trust website “The UK Government have announced some significant changes to the Feed-in Tariffs. If you are thinking about installing a FIT eligible technology then you should be aware of these changes. These changes cover tariff rates, tariff lifetimes, details of the methods for changing tariffs in future and scheme administration issues.”
The same helpful article on the Energy Saving Trust website entitled “UK Government changes to Feed-in-Tariffs – New and proposed” goes on to summarize the changes “For solar PV installations with an eligibility date on or after 1 August 2012:
- The new tariff rate for solar PV <4kWp will drop to 16p/kWh with an EPC band D or higher (if band E or less the lower tariff rate has also dropped to 7.1p/kWh). Full tariff table below.
- The export tariff rate will increase to 4.5p/kWh for all new solar PV installations.
- The tariff period (lifetime) will be reduced for solar PV from 25 to 20 years for all new solar PV installations.
- The tariffs are to be reviewed every three months and will be revised according to deployment rates”
The UK Government has not helped businesses or the renewable energy industry by it’s past procrastination and subsequent constant moving of the goal-posts, so even the above latest changes could all be changed again by them on 1st November 2012. So the only certainty that UK commercial property owners currently have is that they will get a decent return on investment as long as they have fitted, and more importantly have their Solar PV installation commissioned (i.e. the eligibility date) before then. So whilst the Coalition Government “latest” Feed-in-Tariff that came into effect on 1st August 2012 is currently just as fit for purpose investment wise as it was in 2011, it will only remain so if the overall equation does not change too much in the wrong direction. As for the time being the Coalition Government’s Feed-in-Tariff for Solar PV provides a decent return on investment for those UK businesses wishing to switch to the cleaner free green energy that Solar photovoltaic provides.
