Government slashes solar panel payments for homes

The government is set to slash the subsidies available to homeowners installing solar panels on their roofs. Homes with panels already installed and benefitting from subsidy payments will not be affected by the changes – the cuts to the subsidy scheme, known as the Feed In Tariff, will come into effect next January for those with new installations.

The changes will mean that:

  • The amount paid for solar electricity will be cut from the present 12.92p per kilowatt hour to 1.63p for installations up to 10kW. A typical single-home system has an output of around 4kWp (kilowatts at peak performance)
  • For larger installations the new payment levels will be: 3.69p/kWh for 10-50kW, 2.64p/kWh for 50-250kW, 2.28p/kWh for 250-1000kW and 1.03p/kWh for 1MW plus installations
  • Government also plans to link new Feed In Tariff payments to the Consumer Price Index (CPI), instead of the present Retail Price Index (RPI). The CPI gives a lower inflation payment than the RPI, and so would mean reduced payments for investors.

The changes will apply to all small-scale installations of solar panels, including other building types, notably schools and community buildings.

The introduction of the changes in January could lead to a last-minute rush to benefit from the higher payment level over the coming four months.

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