Josh Chang

UK Solar Panels Market Looks Strong Despite August 2012 FIT Fall


Troutdale, OR -- (SBWIRE) -- 09/19/2012 -- Despite the Feed in Tariff (FIT) suffering new cuts in August, the market for UK solar panels appears to be holding its own.

The new FIT rates mean that if a company installs UK solar panels, then it will get 16 p for each kilowatt hour of generated electricity. Before this change, the FIT rate was at 21 p – it was as high as 43.1p in April 2010 when the scheme was first introduced.

An additional change lowers the subsidy timeframe from 25 years to 20 years, which is significant since the lifespan of solar panels is estimated to be around 30 years. In other changes, the previous tariff rate of 3.2 p for each kwh that is exported to the power grids by homes being increased to 4.5 p per kwh.

Despite this drop in the price subsidy, which was put out by the Department of Energy and Climate Change (DECC), solar panels should still be a good buy for investors, as well as home owners who want to install them into their houses.

UK energy rates are said to be rising quickly, according to an official from the STA, which mean that customers who want to save energy costs are looking to solar panels as an alternative to traditional energy sources.

The STA added that it wanted to get this message to potential customers so that they would be aware that the latest tariff rates will still give them a good return on their investments. It’s estimated that they would end up with a return on their investment of around nine percent, according to the Solar Trade Association (STA).

This cut in the FIT tariff follows a pattern of previous cuts, as last year a cut was made reducing it from 43 p to 21 p pkwh. At the previous rate of 43pkwh it was possible for a solar panel to get more than four times the subsidy rates of other alternative energy sources such as that produced by a wind turbine.

The rate cuts were said to have been made in order to make it more equitable for the other alternative energy sources being supported by FIT. Before the rate cuts, the government backed sources and some of the other greening energy plans were getting far less than solar panel installations were and this was seen as “too good to be true” and unfair for all the monies to go to the solar panel industry. This was especially true since the paid subsidies were from monies taken from other consumer’s bills.

That cut was in part thought to be responsible for fewer solar panel installations occurring per month and some installation and manufacturing jobs for solar panels being cut. Since those cuts, the UK solar panel industry has managed to lower its costs, which has in turn helped it to rebound somewhat from its previous woes. Due to those facts, officials for solar panel manufacturers say that this new cut didn’t seem to hurt them as much as the ones from last year – UK solar panels quote comparison company says demand is at least stable, but overall it's down by around 40% since mid-2011.

The DECC announced that bigger installations of solar panels other than just private homes wouldn’t see as big of a cut as expected. Those that install 10 to 50 kw will get 13.5 p per kilowatt hour and those p to 150 kw will see a rate of 11.5 pkwh and those more than 150 and less than 250 kw will get 11 pkwh rates.

Besides those new numbers, installations for places like council and social housing will end up getting a break, as they will get 90 percent vice 80 percent of the standard tariff rates.

The DECC says that the UK can look forward to solar energy businesses playing a large role in the greening of Britain and in improving the output of clean energy for the UK economy.

The DECC also confirmed that the technology for solar panels is going to be added into the upcoming UK Renewable Road Map that is expected to be out later on in 2012. A National Solar Centre is also expected to be built in Cornwall by the Cornwall council and the Building Research Establishment.

In conclusion, the DECC says that the challenge for 2013 is to use what is left of the subsidies wisely and get everyone on footing that is more sustainable with reforms put into place to get the budget and deployment of solar panels running in a way that it should have from the start.

The ultimate goal is to get the solar panel industry in a position where subsidies won’t be needed and instead it will be in a position for both the consumer and the installers to be a cost effective alternative to other types of energy sources like fossil fuels currently being used in many homes and businesses. As prices are forced down by the FIT decreasing, this looks increasingly like it will be acheived.