The 12.47p per kWh incentive for electricity from solar panels has now been closed to new applicants for three weeks. Anyone now installing panels will get 4.39p per kWh which is a 65% cut, previously branded as "huge and misguided" when announced.
Additionally, the cost of solar panels could soon go up by as much as £900 for the average home as the Government have said they should no longer qualify for a lower rate of VAT because of EU state aid rules.
Despite this, The Solar Trade Association say solar is still attractive even though the payback period of an average system (which costs around £6,000) would now be 14 years, up from eight years with the previous incentive rates.
A spokeswoman for the trade body has said: "It’s still a great investment...and for anyone who is replacing their roof, it’s a no-brainer to be replacing with solar."
However, the shadow energy secretary, Lisa Nandy, has written to the environment secretary, Amber Rudd, calling on her to abandon the changes or at least allow a debate in the commons saying: "Just as solar energy is reaching cost parity with fossil fuels, the chancellor’s cuts to the feed-in tariff are short sighted and misguided. The Government is derailing an industry with the potential to be a new British powerhouse."
Alasdair Cameron, a renewable energy campaigner at Friends of the Earth, has said that the 4% return that consumers are expected to get with the lower solar payments are inconsistent with the higher returns new nuclear is expected to get, which are also being subsidised by Government. He also says: "It's hard to avoid the assumption that the Government is treating renewables differently."
