Wednesday, 11 July 2012

The FIT scheme is still very much alive.

Allan has sent in the following:November 2011

It is likely that the proposed cuts will go ahead and we will see a new rate of 21 pence, at this rate you can still get a return of about 4-5 percent. The cuts have meant that many of the smaller installers will go out of business which is not good for our economy, especially right now. It is especially upsetting for all of the people who are going to be losing their jobs just before Christmas.

There is light at the end of the tunnel. Having spoken to a number of people who were planning to invest in their own system they still seem to want to install solar. A couple have mentioned that due to the way the government has made the cuts are not confident that their investment will be safe from future cuts. Instead they are now looking into getting a free system.
Is solar still a good investment?

Most people if they are honest will have invested in their own solar panel system because of the high rate of return compared to what they could get elsewhere. A few will have invested in solar for ethical reasons, yes people did install solar even before the feed-in tariff scheme existed. The question is will anyone want to buy their own system knowing that the payback period is going to be much longer and the financial returns much less?

Many who have missed the boat are no doubt looking on enviously as their neighbours who got in at the much higher rates are enjoying a great return. There is no way of second guessing the public but from much of the speculation and chatter on the internet I suspect there is going to be a quiet winter for solar. The smart consumers are going to want a much better deal going forward and will insist on much lower prices. Many installers are going to have to take a serious hit on their profits in order to attract fewer customers. In turn this will put pressure on the wholesalers and manufacturers to reduce their prices.

It is likely that in 6 months time we will see more competitively priced systems attracting people back into the market. Customers will want to see better percentage returns on their investment. I would however warn anyone looking to install to make sure that they are getting durable, quality components as some installers may turn to cheaper, less robust to poorer performing equipment in order to cut prices.
If you are still considering solar and have yet to make a decision, what are you  going to do?

Allan writes for and is a supporter of renewable technologies such as solar and a proponent of change to a low carbon economy but not at the cost of higher consumer energy bills.

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