The consultation on the Feed in Tariff (FITs) for solar PV installations in being debated in parliament today – they are proposing a 50% reduction in the FIT rate for <4kWp systems from the current 43.1p/kWh to 21p/kWh – due because the FIT system has been so successful and that installation costs have dropped by 30% according to the DECC!! Which is surprising to us at BGH as we have just last month installed a system on the edge of Brighton where the quote from 12 months ago had indeed gone down by 20% but not nearly the 30% they are suggesting.
Our own cost benefit analysis looking at the annuity factor of the capital investment (estimated from our own recent experience) versus the annual benefits when your electricity price is currently £0.14/kWh (on the upper end here in the south), and energy prices are increasing at a (conservative) estimate of 7% per year. Our calculations show that the median annual return of an average sized system for a typical home in the UK drops from £706 per year to £208 – a 71% decrease!!
This effectively means that the payback period on an £8,000, 1.8kWp (10m2) PV system facing south on the south coast would go from 10 years to a whopping 32 years!!