Is it No from the Government to Solar Tariff changes?

"the No's have it"

It took a few minutes and some patient explanation by a colleague (who's well clued up on Parliamentary procedure) to grasp exactly what yesterdays "No - we're not going to change our minds on the solar tariff cuts" vote actually meant.

Yes - the Government is wanting to change the solar tariff paid to homeowners from 43p to 21p from the 12th December, and that's the figure the solar installation industry is now quoting.

However, the tariff rates are still in a consultation period (until the end of December).

So after that consultation period is up, an actual decision will be made and published on what exactly the tariff will be.

One possible outcome is that the present tariff may actually be kept in force until the review in April 2012. However, with the Government crying 'poverty' and saying that the present tariff rate is unsustainable, if the whole tariff scheme is to survive its full 25 year period, that does seem very very unlikely.

Hidden amongst the transcripts of yesterday's proceedings was the statement that, whatever the rate changes to from the 12th December, that amount will only be guaranteed for new installations until the April 2012 review, when it will change to whatever the new tariff is set at. This had already been hinted at, and indeed taken as read by many.

Those homeowners that have already installed solar and are getting the present 43p tariff are still guaranteed that amount for the full term of the tariff scheme.

So, the best advice is to assume that the solar tariff will reduce to 21p for new installations registered on or after the 12th December until the full review planned for April 2012.

You can read the Governments original tariff reduction announcement here.

It's worth remembering that when the original tariff rates were set by the Labour Government, they were basing their figures on a 5% return on investment to homeowners, based on likely solar panel installation costs. It's estimated given the latest solar costs that the tariff of 21p would still give homeowners a return of between 5% and 7%.

photo credit: andy bullock