Partner Article

Feed-in tariff cuts delayed

The Government has delayed plans to cut subsidies for homeowners who install solar panels to generate electricity.

The feed-in-tariff will fall to 16p per KW hour, from 21p on 1 August, not on the 1 July as previously announced. It will then fall every quarter, depending on market conditions.

The new tariffs will reflect the falling cost of solar panels. On the 1 April, the tariff was reduced from 43p to 21p, despite attempts by the Government to enforce the cut on 12 December 2011.

The Government believes that solar panel subsidies need to fall to reflect the lower costs of installing solar panels. the new 16p rate will give a 6% investment return for a typical installation. It also increased the amount consumers get for selling electricity back to the national grid to 4.5p per KW hour from 3.2p.

Commenting on the changes, Energy and Climate Change minister Greg Barker said: “The sector has been through a difficult time, adjusting to the reality of sharply falling costs, but the reforms we are introducing today provide a strong, sustainable foundation for growth for the solar sector.”

Through the feed-in tariffs scheme, consumers are paid for the energy they generate, including that which they use and that which they sell back to the grid.

The tariffs also cover a number of different technologies, including solar panels, wind turbines, anaerobic digestion and hydroelectricity. Tariffs vary depending on installation costs.

This was posted in Bdaily's Members' News section by Ruth Mitchell .