So, another year, another heavy FiT rate cut, another year of turbulence!! On the 15th Jan FiT rates were cut from 10.9p per kWh for 10 - 50kWp systems down to 4.59p, and for 50 - 250kWp from 9.29p down to 2.70p. For domestic the rate was cut from 12.03p down to 4.39p and a new caps system has been introduced where deployment for a given quarter can't exceed the cap.
So what does this mean?
It means that the government is prioritsing commercial roof top solar over residential solar PV with a higher tariff, meaning higher rates of return for customers with large roof top areas.
Does it still make sense
Yes, with falling installation prices, its still possible to make a 15% ROI on your investment.
A typical 50kWp installation on a conventional roof goes a bit like this,
Full installation cost = £50,000 + VAT (this includes all materials, scaffolding, full installation and commissioning)
System output = 47,350kWh (this is for a south facing roof at 20 degrees in the London area, output would be higher anywhere along the south coast).
FiT income =£2,173 per year, a 4.3% ROI (this is based on 4.59p per kWh and is a cash payment)
Electricity Savings = £5,208 per year, a 10.4% ROI (this is based on 100% consumption at 11p per kWh)
Total income & savings = £7,382 per year, a 14.7% ROI. Over a 20-year period this works out at 17% ROI (assuming 2% RPI and electricity price inflatin)
Saving the planet = This will also save 6 tonnes of CO2 from being emitted every year, so you can do your bit to save the planet.
Solar PV still makes sense, the returns are still better than most investments, so if you are interested in looking further into it for your building, please contact us.