The rules governing the running of solar panels are set to change, something which could spell the end on free solar panels for thousands of houses up and down the UK. So what’s happening and is it too late to cut your bills with free solar energy?
The government has announced some drastic changes to what it will pay to solar panel owners, slashing the amount the green energy generators could make by over 50%.
Originally the amount of money you could earn from the government-backed Feed in Tarrif was set to be slashed for all panels installed on or after 12th December, 2011.
However, following the government's defeat in the High Court, proposed changes to the Feed in Tariff have been delayed until March, 2012.
So does this spell the end of free solar panels and if you want panels installed on your home what can you do to avoid missing out?
What’s the deal now?
Currently there are dozens of solar panel companies all offering free solar panels to homeowners up and down the UK.
Essentially the free installation is pitched as a win-win scenario, where the home owner gets free energy from the solar panels, cutting the cost of their energy bills and the company makes a profit by selling excess energy to the government through a Feed in Tariff (FiT).
Read our guide: Free Solar Panels: The Key to Cheap Energy or Just a Con? for more information on this now well established green industry.
However, upcoming changes to the Feed in Tariff could make solar panels much less profitable for solar energy companies and homeowners alike - meaning we could see the ‘free’ solar panel business model come to an abrupt end.
So what’s changing?
The crux of the changes is that the government will pay much less for energy generated through solar panels installed on or after the 3rd March, 2012.
If you already have solar panels or are scheduled to have them installed before the 3rd March, you will continue on the original Feed in Tariff rate of 43.3p/kWh for the duration of your 25 year agreement - providing your installer has registered you for a MSC certificate.
Anyone who has their solar panels installed on or after this date will see the amount the government pays per kWh slashed from 43.3p to 21p from the 1st April, 2012.
This change will make solar panels a much less attractive proposition for businesses offering free panels to homeowners and it is unknown whether they will still be available free of charge.
Energy efficiency requirements
Another change to the solar panel Feed in Tariff scheme announced by the government could see the FiTs rate slashed even further if homeowners fail to make their properties more energy efficient.
From the 1st April, 2012, a new energy efficiency requirement may be introduced, which could potentially require homeowners to reach a level C Energy Performance Certificate or make all the required changes listed on an existing Energy Performance Certificate which qualify for Green Deal finance.
Initially homeowners will be given up to 12 months to meet these energy efficiency requirements; however, if they fail to do so their FiTs tariff may be cut to a measly 9p/kWh.
Again this is likely to make the free solar panels model less attractive to existing solar panel providers as they would need to make sure homes were energy efficient to receive even the reduced rate of 21p/kWh.
What can you do?
I want free solar panels and lower energy bills
Essentially if you want to have free solar panels installed on your roof then you need to act now.
Although many solar companies may originally have taken several weeks to arrange the installation of solar panels, with the March deadline fast approaching they may be keen to bring forward as many installation projects as possible to secure the higher Feed-In-Tariff rate.
Contact a solar panel company operating in your area to find out if your home will qualify for free panels and whether there is time for them to be installed before the deadline.
For more information on what type of home currently can apply for free panels, and for a list of some of the major providers read our guide: Free Solar Panels: The Key to Cheap Energy or Just a Con?
I’m planning on using the FiTs tariff myself
If you are planning on purchasing and installing your own solar panels and signing up to the feed in tariff directly then you may be left wondering if the new lower rate will make purchasing and installing the solar panels economically unviable.
You can use the Energy Saving Trust’s Feed in Tariff calculator to check how long it will take to repay the cost of your solar panels based on both the pre & post March tariff rate and check if it still makes economic sense to proceed with the installation.
If you decide that it’s only worthwhile installing solar panels if you are guaranteed to get the full 43.3p FiTs rate then you should try and book installation before the 20th February, 2012.
This is because it is the certificate date which will determine which tariff you will qualify for and under current regulations installers must provide you with a certificate within 10 working days.
If you plan your installation between the 20th February and the 3rd March deadline you will need to check with your installer that you will get your certificate in time.
Are these changes set in stone?
Although the government have announced these planned reductions they are not as yet set in stone.
Following the government's defeat in the High Court, its current plans are to introduce the cut FiT rate for all installations made on or after 3rd March, 2012, with the reduced rate coming into effect from 1st April, 2012 - although this proposed change could again be subject to a legal challenge from Solar Energy companies
Equally the government is also applying for permission to appeal against the original High Court ruling to the Supreme Court, which could reverse the decision and mean tariffs back dated to the lower rate of the 12th December, 2011.
So although it is likely that the FiTs tariff will change and it makes sense to plan for the current set of changes, it may be a case of watch this space.
