Homeowners have just over 60 days left to secure an eye-catching return on investment if they go ahead with a solar PV installation on their property. As of July 1, the Government is slashing the feed-in-tariff subsidies available for domestic schemes of less than 4kW from the current 21p to an expected rate of 15.7p. It may be as low as 13.6p but no higher than 16.5p.
Under the present FIT rate, the return on investment is more than 10 per cent and is index linked and tax free, fixed and guaranteed for 25 years.
However, when the rate reduces to 15.7p – or the 13.6p rate if deployment in March and April is between 150 and 200MW – the potential return on investment will drop to between 4 and 6 per cent.
David Hunt, a director with leading renewable energy company Eco Environments, said: "This is the final chance for consumers to secure a fantastic return on investment if they go ahead with a solar PV installation before July 1.
"After this date, the FIT rate will drop dramatically to 15.7p and potentially lower still, which will make a domestic solar PV scheme appealing only to the really green investors rather than those who are coming at it mainly for the eye-watering financial returns."
Last year, the feed-in-tariff rate for domestic schemes under 4kW was slashed from 43.3p to 21p and, should the new rate fall as low as 13.6p this would amount to a 68 per cent fall in the rate since December. The rates are due to reduce further still in October this year.
While the industry has responded as best it can by reducing the cost of solar panels and installation during this period, it would be completely "untenable" for them to keep pace with the level of the Government's FIT reductions as product prices are not coming down at anything like that rate.
David Hunt added: "The Government would like to have us believe that the draconian slashing of the feed-in-tariff rates during the past six months is about providing medium to long term certainty in the market.
"Back in the real world, the Government's chaotic handling of the FIT rates is killing tens of thousands of jobs in the renewable energy industry and taking away from consumers one of the best financial investments available to them during extremely uncertain economic times.
"Perhaps the Ministers responsible will one day explain why they have been so hell-bent on hurting both industry and the consumer with their reckless policies."
