Summary: This study shows that 8 installers have confirmed they will continue to supply free solar panels at the new lower rate of 16.8p. Of these 4 continue to supply free solar without any changes to their offer.
The feed-in tariff scheme run by the government to promote the use of renewable technologies that produce electricity changed on April 1, 2012. After a review it was announced that the tariff rates are to be reduced from 37.8p per kilowatt hour generated down to 21p for sub 4kWp retro fitted installations as long as the property met the new EPC rating.
Further to this it is proposed that a multi-installation tariff will be used for companies who install multiple solar installations such as those offered by free solar panel companies. This new lower rate will be set at 16.8p per kWh to reflect the economies of scale these companies can achieve.
After the consultation and review the government believes that the popularity of solar PV in the UK has meant that the rate of uptake for the FIT scheme far exceeded their expectations and had to act in order to make sure that the tariff did not become an unsustainable burden.
The cost of PV has fallen since the scheme started and has therefore made the returns for those who invest in solar much more attractive. The rate of return in some cases reached double digits. The high rate of return that far outstrips many financial investments has attracted households to install a solar photovoltaic system primarily for the greater financial returns. Whilst the FIT scheme was meant to offer a financial incentive as an element to attract people into adopting green technologies it was also meant to allow the market to decide where solar would have the most benefit in reducing carbon emissions.
According to the CompareMySolar UK solar price index for installation under 4kWp prices have fallen by about half between January 2011 to January 2012. http://www.comparemysolar.co.uk/price-of-solar/
In addition to the reduction in the rates paid out under the FIT scheme any households that want to have solar installed and want to receive the 21p tariff rate also need to have an Energy Performance Certificate (EPC) that shows their home has a D rating or higher.
An EPC needs to be submitted at the time you apply (or more usually your installer applies) to register for the FIT payments. If you achieve a D rating you will qualify for the 21p rate if not then the 9p rate will apply.
The new lower rate that will apply to aggregators such as the free solar installers will mean that they will only get 16.8p per kWh from April 2012 where before the rate was as much as 43.3p per kWh.
Free solar panels are funded by investors providing funding to installers who in turn provide free systems to home owners. With the lower rates it will mean investors will not be making as good a return and in many cases may mean installers are unable to attract new investment to continue providing free solar.
I have been maintaining a list of providers of free solar panels in the UK since the feed-in tariff scheme first started. You can see the full list on the free solar panel installer's page. When the FIT scheme first started there were only a few providers but over time the number of firms where you can apply for free solar has increased. Some providers are only local and so offer solar to the area local to where they are located. Some of the larger installers have close to national coverage; the exception to this is Scotland and Northern Ireland.
To determine the effect of the lower rate tariff on the provision of free solar all the existing suppliers were contacted. Installers were contacted to ask how the new 16.8p rate for multiple installs will affect their ability to offer free solar post April 1 2012 to determine if the cuts are reducing capacity in the UK.
4 out of the 40 installers listed have confirmed they will still provide free solar without any restrictions.
Half of all the providers have stopped providing free solar. The majority of installers who have dropped out of the free solar market are continuing to trade and provide paid solar. Three of the installers have ceased trading; I have been unable to confirm whether this is due to the changes the government have made to the feed-in tariff.
A number of installers did withdraw their offers prior to the change in the rates. One of the more notable exits from the market is Homesun who were one of the larger installers in the market. This leaves the two main providers A Shade Greener and Isis Solar who have both confirmed they will continue to offer free installs after April 1, 2012.
Some installers are still continuing with their offers but are reducing the areas that they cover. Although some installers may not be saying publicly many will have to make their application criteria stricter due to the lower rate being offered under the FIT scheme. Ecovision Energy and Freesource Energy have stated that they will be limiting their application area to the south west of the UK. The focus on this area is due to the higher levels of insolation, there is more sunshine in the south west so their solar panels are more productive compared to most other parts of the UK.
Of the 20 providers left in the market many have not updated their sites or responded to questioning about whether they still provide free solar. A few of the sites have not even been updated since the end of 2011 and so I am unable to confirm whether or not their offer is still valid under the new rate. Only 9 free installers have definitely confirmed that they are continuing to offer free solar, several have reduced their area of coverage, increased their restrictions and one has added charges.
We want everyone to benefit from solar power, and will continue to provide customers with free systems wherever we can.
Jonathan Thompson, Green Nation
A Shade Greener remains committed to providing free solar systems to the public and will continue to offer them entirely free of charge for the foreseeable future. We have no plans to stop, despite the tariff changes that were implemented April 1st 2012 in respect of companies such as ours. As well as entirely free solar, we will also carry out an entirely free Energy Assessment, which will provide the homeowner with an EPC certificate that will be valid for 10 years.
Stewart Davies, A Shade Greener Ltd
Freetricity now charge a £495 fee for their free system to cover costs such as administration, scaffolding and to cover the cost of the new EPC requirement. Isis Solar have stated that they will continue at the new rate. Engensa have confirmed they will be supplying free solar until at least July.
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