New solar panels will not offer the same financial rewards

The government’s revelation towards the end of 2011 that solar panels fitted after December 12 would be significantly less lucrative for home-owners lead to a sudden and dramatic increase in demand for the green energy source.

As a way to encourage UK residents to have solar panels fitted to their homes, the government had launched the feed-in tariff programme which paid cash for any excess units of energy, not required by householders to power their home, which could instead by directed to the National Grid. When the scheme was launched at the start of 2010, homes powered by green energy were benefiting from  an extra 43.3p per kilowatt hour for their unwanted power.

However, the Department of Energy and Climate Change (DECC) announced, just a few weeks before the end of 2011, that any solar panels fitted after the cut-off date would only be paid 21p per kilowatt hour for their unwanted energy; a substantial drop considering the costs involved in having the solar panels fitted in the first place and in keeping them maintained.

In response to a question asked in Parliament by the shadow energy secretary, Caroline Flint, the Department of Energy and Climate Change was forced to admit that their last-minute announcement had lead to a massive increase in the number of people who had decided to have solar panels fitted to their homes, in order to make sure they secured the higher payments for their energy.

Between the launch of the feed-in payments in April of 2010 and the announcement that the payments were going to be cut there were around 220 solar panel installations a day; a total of almost 27,500. However, in the days following the revelation by Chris Huhne, the government’s Energy Secretary, that new solar panels would not be as much of a money-spinner for their owners, over 100,000 solar panels were fitted in just six weeks, a staggering 2,400 a day and a rise of over 1000%.

Figures from the Department of Energy and Climate Change reveal that home-owners who beat the December deadline will benefit to the tune of £1000 per year on average, meaning that the unexpected announcement and the sudden rush to have the work done before the cut-off point could end up costing the government – and the British taxpayer – well over £100 million.

While Caroline Flint agreed that the feed-in tariff payments had to be reduced, she was critical of the way in which the process was managed, arguing that a more staggered decrease would have prevented the massive demand for solar panels seen in the final weeks of 2011.

Renewable energy supporters have already won the backing of the High Court in their bid to keep the feed-in tariff payment at its original higher rate, insisting that the cut should not have been allowed as it was made during a consultation period on wider green energy issues in theUK.

Chris Huhne has already announced that the coalition government plans to challenge the verdict, with a spokesman from the department adding that the rules on payments for renewable energy would be verified once the High Court had made its decision some time in the next few weeks.