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Feed-in tariffs – will the sun stop shining on solar panels?

Plate full of coins

The government has announced drastic changes to the feed-in tariffs scheme, reducing the amount of money people can get for feeding home-generated energy into the national grid. Will this put you off getting solar?

As we’ve discussed before, households are being encouraged to generate their own energy using solar panels.

The Feed-in Tariff (FIT) scheme pays solar panel owners who generate their own energy, as well as for any excess put back into the National Grid, but solar panels are a large purchase, so payback isn’t immediate.

Install now or receive reduced rates

Today the government announced that its Comprehensive Review of FIT is consulting on reducing the level for small installations of 4kW. The proposed reduction is to 21p/kWh, which is an over 50% reduction on the current 43.3p/kWh rate.

This wouldn’t affect those of you who already have FIT, but if you haven’t got a system installed and registered by 12 December 2011, you won’t get the current level of payments.

FIT payments are subsidised by us through our bills. The government estimates that not changing FIT would cost us all £980 million a year by 2014. The reduced rate would lower this to £250-280 million.

Extend the deadline

We want to see value for money from these subsidies, as they come out of our pockets. But while we’re supportive of reduced subsidies to match reduced costs of installation, we think a deadline of 12 December is too soon. We want the government to guarantee that those people who have already signed contracts or paid deposits get the current rate, as they’ll have made their decisions based on that.

In June Which? investigated 12 solar PV (photovoltaic) installers and found the outlook was not so sunny for households, finding poor advice, pressure selling and mis-selling.

As a result of the research we’ve worked with Energy Saving Trust (EST), British Photovoltaic Association (BPVA) and the REAL Assurance Scheme to produce an installation checklist (PDF) to be used by anyone thinking of getting solar panels. We’ll be asking installers to include it on their websites and to send it to customers who are interested in solar.

EST has just released another online tool to help you decide if solar is for you. We think the two of these together will help people to get the best solar deal.

How to buy solar panels

To make sure you’re getting the right system and good value for money, there are a number of key things you need to check before you sign anything. Make sure any quote comes on the back of a visit from a surveyor, not a salesperson, and don’t sign anything there and then. You shouldn’t feel pressured into buying by discounted offers that force you to sign during a visit.

The surveyor needs to fully check that your roof can support solar panels, and take into account the roof tilt, direction and any shading. And they should also ask you about how you currently use your energy. If you’re out of your house all day, for example, that will have an impact on how quickly the system will pay for itself.

So, do you think the cut to FIT tariffs have rained on the solar parade, or is the outlook still sunny?

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