If you are thinking of installing solar PV (photovoltaic) panels, it could be time to get your skates on. The rules governing how much you will be paid for the electricity you generate (the Feed in Tariff or FIT) are due to change on the 1st August.
If you install solar panels before that deadline, you will be paid 21 pence per kW hour of electricity that the panels produce. That is tax free, index linked and guaranteed for 25 years. That’s a lower rate than the 43 pence per kW hour paid previously, but the cost of installation has fallen sharply in the last few months. In fact, anecdotal evidence suggests that costs have fallen by around 50%, which could make even the current rate attractive.
For panels installed from the 1st August onwards, however, the rate falls to 16 pence for each kW hour generated and the period during which the income is guaranteed is shortened to 20 years.
Both changes will have a direct effect on the return you can expect. The Government is hoping that the cost of installation will fall even further and has set up a system of revising the FIT every three months. It will cut the rate again if it believes demand remains strong but will keep it at the new rate if it looks like demand is falling.
You can find more details on the ofgem web site