What does the Government’s changes to domestic solar panels mean for me?
THE GOVERNMENT may have backtracked on its plans to cut financial incentives for solar panels but a proposed hike on VAT in still in the pipeline.
A rise from 5 per cent to 20 per cent on VAT for solar photovoltaic panels, which are used to provide electricity, and solar thermal panels for hot water systems, is still due to go ahead from August 1, 2016.
It follows a review into the current Feed-in-Tariff (FiT) for domestic solar panels, which sees homeowners receive a payment for the electricity they produce.
On Thursday, December 17, the Department of Energy and Climate Change announced that the FiT will see a reduction of 64 per cent – from a payment of 12p per kWh to 4.39p.
The cuts are less than the originally proposed reduction of 87 per cent – but will still have a significant impact.
So what does all of this mean for people who are considering installing solar panels?
Act sooner rather than later.
There are lots of reasons why homeowners should look at renewable sources of energy and by cutting the Feed-in-Tariff and proposing to increase VAT on solar panels, the Government is admittedly sending out a mixed message – especially in the wake of the United Nations Conference on Climate Change.
However, we have seen changes and cuts many times before and, despite the Government’s fluctuating energy policy, there is a huge appetite for renewables from the general public and a desire for a greener lifestyle.
With or without the Feed-in-Tariff, there are many benefits to installing a solar PV system. Not least is the fact that the price of installation has fallen dramatically so once you’ve recouped the cost of the initial system, any electricity you produce is free.
We still have very limited availability if you want to avoid the proposed changes to the FiT in early 2016 and if you’re worried about the VAT rise next year, just ask us for a free quote.
For more information about how you can make solar power work best for your home or business, contact us now on 0845 474 6641.