The Department of Energy and Climate Change is expected within days to announce a cut in the “feed-in tariff” (FiT) from its current 43p per kWh to about 20p per kWh, the Financial Times has learnt.
The move is likely to prompt a pre-Christmas rush by families to install solar panels on their roofs before the current generous subsidies are halved.
The new figure is high enough to maintain investment in the industry in the coming years but will stop what officials see as an overwhelming take-up by households.
Solar companies had been afraid that the FiT could be reduced to 9p per kWh, as had been urged by some within DECC. At that level it was feared that the industry would be decimated.
Solar panel subsidy to be cut to 20p?
Moderator: Peak Moderation
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An Inspector Calls
Solar panel subsidy to be cut to 20p?
FT 26th October 2011
It's pretty reasonable. The 43p rate was on the high side, evidenced by its facilitation of non-optimal deployment. We've also seen the cost of deployments falling by 20-25%. Guaranteed returns of ~10% is too generous. I think 25p would have been better than 20p, however, if prices continue to fall through next year, the 20p rate will be perfectly reasonable.