Feed-in Tariff Confusion

The confusion over the cuts on the Feed in Tariff has fortunately not left industry at a stand still. Sales after 12th December have still been on the rise as the cost of materials and installation have come down dramatically. Even the reduction of the feed in Tariff to 21p can still give you a 10% annual return on investment, greater then any Bank interest or ISA . Probably the only aspect of the current situation that is not certain is that there is  not clear idea of what the Feed in Tariff will be over the next few months. Either way a Solar PV installation is still a great investment. 

The Facts

• On Wednesday 4th January DECC sought permission to appeal against the pre-Christmas court ruling that their announcement of the reduction in the feed-in tariff was “legally flawed”.
• You can read an article on the appeal and view the full text of the appeal request on the Guardian web site.
• DECC have issued a Press Release about the appeal.
• The appeal court will first decide if DECC will be granted leave to appeal and if so there will be an appeal hearing. There is no fixed time set yet for either their decision on hearing the appeal or when any appeal hearing would be, but it would seem likely to be mid – late January before any final result.
• The REAL Assurance Scheme administrators have put a statement from DECC on their web site and confirmed that providing potential customers are fully advised of the current situation there should be no reason under the REAL Code why an MCS installer cannot continue to sell Solar PV to consumers during this period.
• The wholesale price of a compete kit of parts for a typical solar PV system from Segen has reduced from around 2.50 per Wp down to around 1.25 per Wp since the initial launch of the FIT scheme in April 2010, matching the DECC proposal of a 50% cut in the feed-in tariff.
• There have been 1,741 registered installations of solar PV systems in the first two weeks following Dec 12th for people who are willing to go ahead assuming they will receive the DECC announced rate of 21p per kWh from 1st April onwards. That is a similar run rate to late Dec 2010.
• There are multiple sources of independent news regarding the on-going developments including The Solar Power Portal and Click Green.
• Nobody knows the final outcome of the appeal process or the review of the feed-in tariff itself, but the only other thing which is certain is that within a couple of months the FIT rate for domestic scale solar PV installations will be a lot less than 43p, it’s only a matter of the exact timing.

We think that despite the current uncertainty there is every reason to believe that the PV market in the UK (at 21p per kWh) will continue, even if at a slower pace than in 2011, and that quality installation businesses with a good sales and marketing process will continue to thrive and that Segen will support them throughout 2012 and beyond with quality products and services.

We hope you found the above information and links useful and we can all only hope for a speedy resolution to this situation.