Ignore the Storm
Despite the latest changes to the feed-in tariff, fitting photovoltaic panels is still worthwhile
Up on the roof of St George’s Church, Kemp Town, in the past week, technicians have been fitting an array of solar or photovoltaic (PV) panels. Given the aesthetics of the building, the aim is to ensure that they aren’t visible from the street. The project is the final one to be carried out from the Brighton Energy Co-op investment prospectus published a few months ago. The non-profit group asked the public to subscribe for shares to fund three installations. The aim was to complete the work by the end of July.
The other two projects were the Hove Enterprise Centre at Shoreham Harbour and City Coast Church in Portslade. With the team from local firm South Downs Solar due to complete their work in Kemp Town on Monday 30 July, there will have been sighs of relief that the installation will benefit from the current feed-in tariff. On Wednesday 1 August the amount paid for surplus solar power fed back into the national grid reduces again.
There has been something of a solar storm around the reductions in the feed-in tariff. The industry and its clients were caught off-guard last year by an expected change in the rewards for those who put up panels. Brighton & Hove City Council was one of those clients to have a rethink, delaying its £2.6 million plans for 40 public buildings while it reworked the numbers.
But in the industry some have suggested that the initial concerns have been overtaken by other welcome changes. The most important of these is that production prices are coming down even while the efficiency of the panels improves. The feed-in tariff is important but it’s only one factor in a changing equation.
In short the solar salesmen and women will tell you that PV panels remain a good investment. Splash out, say, £8,500 and you can expect to recoup savings of more than £16,000 on your electricity bill over 25 years – the typical period used for financial projections. Over the same timescale, the feed-in tariff should generate a return of more than £22,000.
In short, solar panel suppliers have switched from an early response of doom and gloom to a sunnier aspect. They are reminding customers that almost any return beats the almost non-existent interest rates offered to bank or building society savers. And the payback period comes in at under seven years for a growing number of properties.
Of course some of the subscribers to the Brighton Energy Co-op’s community scheme will have signed over their money for environmental reasons rather than financial ones. They can expect a return on their investment but more importantly they want to be part of the momentum for the greener generation of electricity. In addition, they want to help reduce our carbon footprint and renewable energy is a good starting point.
Another change from the start of August is that the feed-in tariff will be paid for 20 years rather than the current 25 years. Those working in the industry are adamant that it remains worth investing in solar panels even with the shorter pay-out period and lower rates. They point to refinements in design which will make a new generation of PV panels more attractive to the eye. Added to the fact that every uncertainty over oil and gas supplies – and the effect on fuel prices – from unstable or unfriendly exporting countries makes solar power look even more reliable.
Many in Brighton and Hove are receptive to the idea of solar power for sound environmental reasons. As the feed-in tariff becomes lower and less relevant, more people are likely to make their choice on financial grounds alone without worrying about whether government policy might change. The financial equation will become simpler, the initial outlay will be lower and the savings on fuel bills will remain worthwhile. It’s a sunny outlook.
