What Do The FIT Cuts Mean For Free Solar

Sat, 5 Nov 2011 08:18:00 GMT

The recent announcement by the government that the feed-in tariff rate is going to be cut by half has caused a lot if confusion about free solar. There has been a panic rush of applications to try and beat the December deadline as people are worried that they will not be able to get a system installed after this date. So what does this all mean?

The cut in the tariff rate is certainly going to mean that many of the smaller installers are not going to be able to continue operating. I have spoken to several solar companies who have said they will unlikely be able to offer PV systems from the new year onwards. It is also likely to deter many people from investing in their own system as they may not find the new rate of return as attractive. Initial estimates by some solar pundits say that the return for investing in a solar PV system may be around 5 to 6 percent if the rate cut goes ahead. We will not know for sure until the government finishes its review.

Will I still be able to get free solar panels?

What you really want to know is whether or not you will still be able to apply for free solar panels after the date the rates are due to be cut. Several companies have said they will continue to trade but the only installer I do know for certain is A Shade Greener who have said they welcome the governments announcement and that it will clean up the industry. You can read my review of a Shade Greener to find out what they are about.

Should I still invest in solar?

If you were considering buying a solar PV system you may be concerned about whether or not solar will still be a good investment. Whilst you obviously won't make as much tax free profit from your investment you are still going to be able to make a profit. This means cash in your pocket you are not getting by leaving your money in the bank. You are also going to still continue to save on your electricity bills. A recent study by the largest installer A shade Greener showed that the average saving on the energy bills of customers with solar installed was 37%. For the average household this means several hundred pounds savings a year and as energy prices rise so will the savings.

For those looking for a free system you may find that there are not as many companies offering them but you will still be able to apply and get them if your home is suitable from those companies that continue to trade. If you are thinking of buying solar panels you should either get your system as soon as possible to lock in the old higher rate. If not I'd wait until the dust settles in the new year and you may find that you can get a bargain priced system as solar companies are fighting to attract customers so may be willing to offer deeper cuts on their prices.