Even after August deadline solar will still be viable says STA
With just 12 days looming until solar subsidy cuts come in to force, the Solar Trade Association is urging homeowners to have faith in the technology which it says will remain an attractive option after August.
The Solar Trade Association (STA) has addressed concerns over the viability of the technology when the feed-in tariff (FiT) scheme drops from its current rate of 21p/kWh to just 16p/kWh. According to H&V News new calculations from the STA show that a solar PV installation will still be an attractive investment after 1 August.
Homeowners installing an £8,000 4kWp system will see it pay for itself within 10 years, achieving returns of 9.2% over a 20 year period – the new life span of the solar subsidy scheme.
Commenting on their calculations, Solar Trade Association CEO Paul Barwell said: “Our figures show that solar is a no brainer investment. Compared to the returns you can get these days in banks and many other investments, solar provides a very sold and attractive return.”
With energy prices rising and electricity bills spiralling out of control – and showing no signs of slowing down – investing in renewable energy technologies such as solar PV will give homeowners more control over their energy costs. Electricity prices are important when calculating returns; the STA calculations are based on the Government’s projected increases in electricity prices, which are climbing faster than anyone could ever have foreseen, as well as established national average yields from solar power.
However, electricity prices are in fact rising at a faster rate than the Government data which was used by the STA. Analysis of statistics by the Renewable Energy Association (REA) reveal that the average annual increase in electricity bills between 2005 and 2011 was actually 6.6% above inflation. If you take in to account the real-world rate of increase in electricity prices, it would mean that a 4kWp system installed in August would actually achieve a payback period of 9 years and returns of 11.4%.
“Nobody knows what electricity prices will be in future but we do know they have gone up substantially over the past few years. This trend may well continue as the UK becomes more reliant on importing its energy in an increasingly competitive world,” added Mr Barwell.