The government has confirmed it will not replace the popular Feed-in Tariff (FIT) scheme once it expires in next year – meaning an end on the horizon for financial support for small solar panel systems.
In a consultation published on 19 July, the government is seeking views on its plans to close the FIT scheme to new applications from March 2019, one month before it expires.
The FIT scheme has been behind the huge increase in both domestic and non-domestic solar panel systems across the country since 2010. It provides a 20-year subsidy payment for every unit of clean electricity generated, as well as an additional tariff for exporting surplus power to the grid.
The scheme also supports a range of other small-scale renewable energy technologies, including wind and hydropower.
Coming of age?
The government has not categorically ruled out more support at a later date and has launched a separate consultation to explore the future of small-scale low carbon energy in the UK.
However, the government believes that less support is required for ‘mature’ technologies like solar, because costs have fallen dramatically in recent years.
Chris Hewett, chief executive of the Solar Trade Association, said that solar power was “coming of age”, with the average domestic system now costing around £5,000 compared to £12,000 in 2010.
“The bad news”, he added, was that the government was “frighteningly vague on what comes next”.
Time running out
Companies interested in installing rooftop solar systems now have less than a year to make the most of the subsidy scheme while it is still available.
The future of the solar market is more likely to be driven by other mechanisms, such as Power Purchase Agreements (PPA) whereby a third party owns the panels and sells electricity generated back to the building owner at a fixed price.