UPDATE: The Feed-In Tariff is now closed for new applications. To find out about the new scheme designed to replace it, click here.
Solar can be a bit of a complicated area: governments make complex announcements, cold calling companies promise the world, and the subsidies change all the time. It is quite hard for the consumer to fully understand how everything works. So can you get a grant for solar PV?
The previous solar PV financial support mechanisms
A few years ago the photovoltaic solar panels or solar PV were prohibitively expensive for most people – costing in excess of £15,000 for a basic system. To incentivise people to install these systems a few years ago, the Government gave out pretty generous subsidies through the feed-in tariff (FiT) and therefore create a reasonable payback period. The FiTs are a series of quarterly payments to the customer for producing a certain amount of electricity.
In addition, here in London right up to 2009, many local authorities gave away partial subsidies to their residents to make sure the initial investment wasn’t as high as it would otherwise be. This led to a high take up and the funding ran out fairly quickly. Although this can be seen as positive, the Government reduced the tariff to create a more competitive market and hopefully let the industry stand on its own, especially given the falling price of solar technology.
Current solar PV financial incentives
The Feed-in tariff
The days of the 43.3p/kWh Feed-in tariff are long gone, so you may ask yourself, is solar PV really worth it? The answer is – that although the rates have significantly decreased (currently 14.38p/kWh, April 2014) the price to install a generous 4kWp system has also reduced to about £6,500. So the tariff has only gone down as the price of installation has also reduced.
When you have a solar PV system you have to also consider the savings in electricity by not paying for grid electricity. The current price of electricity hovers between 12 to 15p/kWh, so you could be saving £100s by simply running your appliances during the day and not having to rely on expensive mains electricity.
Finally, 50% of the electricity that you generate with a solar PV system is assumed to be exported back to the grid. You therefore get paid an additional 4.77p/kWh.
Both the Generation and Export Tariff are inflation-adjusted and are guaranteed for 20 years.
Green Deal Finance
UPDATE: As of 30 March 2016, the government has stopped funding and the Green Deal Home Improvement Fund is closed to new applications. Read more here.
The Green Deal is not a grant, but the finance product that is available can help you meet some of the upfront cost of a solar PV system.
How does solar PV work with the Green Deal?
First of all you will need a Green Deal Assessment undertaken on your property and following that the system will need to be a formal recommendation on the report. You will then need to get quotes from Green Deal Providers, who should tell you how much of the cost will be borne by Green Deal Finance. Expect this to be in the region of 20 – 40%, depending on the size of the system, your location and the orientation of your roof.
Free solar PV
You don’t have to have a grant and you could get the whole thing for free, by essentially leasing your roof space to a solar company who will install and own the system for 20 years. We have a blog about free solar here.
What is the catch?
There is no catch, just that you will not own the system and therefore will not access the generation or the export FiT payments, which will belong to the company that has installed it. However, you will benefit from the free electricity that is generated on site.
Recently with the FiT tariff payments going down over the last 12 – 18 months, the number of viable roofs has reduced so even if you want a solution like this, it is quite unlikely that you have the right roof or a located in the right area to benefit from this.
In addition, by effectively leasing out your roof space you need to be careful with how this is managed with your mortgage supplier. Always keep them in the loop and make sure you seek the opinion of a local estate agent if you if you see yourself selling the property in the foreseeable future- as these ‘rent-a-roof’ schemes have known to impact the property prices.
Grants for solar PV – final verdict
The days of generous grants from the Government or local authorities are long past us unfortunately. However with solar PV install prices falling, you may still want to consider getting a system installed if you can afford the upfront cost.
Think we missed something? Do you have a different opinion?
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