Lucrative solar panel scheme slashed in half

Seamus Rotherick
By Seamus Rotherick October 31, 2011 16:15

Lucrative solar panel scheme slashed in half

Golf clubs have just six weeks to sign up to the lucrative Feed-in Tariff (FiT) rate that can be secured from installing solar panels, following an announcement today from the government that it will cut FiT payments in half from December 12.

The proposal would see the money clubs get for solar panel generated electricity reduced from 43.3p per kWh to 21p on installations below 4kW, from 37.8p per kWh to 16.8p for installations with four to 10kW of capacity, from 32.9p per kWh to 15.2p for installations with 10 to 50kW of capacity and from 19p per kWh to 12.9p for installations with 50 to 150kW of capacity. Larger installations with 150 to 250kW capacity will see tariffs fall from 15p per kWh to only 12.9p and anything above 250kW will maintain the same rate of 8.5p per kWh.

According to energy expert, Michael Rogers, the average golf club, which would install the 50kW system, would have expected to recoup about £20,000 per year from FiT payments, ensuring the panels would have paid for themselves in about seven years. The payments are also guaranteed for 25 years and exclude the reduction in electricity bills that would result in clubs using their own energy, and do not take into account the money the clubs make from selling energy not used to the National Grid.

However, if they put the panels in after December 12, payback periods would now be expected to last at least 14 years.

The government says the new return would be 4.5 to 5 per cent, even though some clubs are currently seeing returns of 12 per cent.

The proposals are open to consultation until December 23 – 11 days after the cuts kick in.

Energy Minister Greg Barker said: “Although I fully realise that adjusting to the new lower tariffs will be a big challenge for many firms, it won’t come as a surprise to many in the solar industry who’ve themselves acknowledged the big fall in costs and the big increase in their rate of return over the past year.”

Seamus Rotherick
By Seamus Rotherick October 31, 2011 16:15
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