Solar PV Prices Slashed After FIT Change

The_Green_Hornet

As expected, the recently announced FIT reduction has had the desired effect in slashing the installation costs for Solar PV systems installed after 12th December.

Tescos have already announced a 3.84 kWp system for the miserly sum of £8,499 (inc. VAT) and I fully expect prices to drop further next year as competition hots up within the industry and profit margins are squeezed.

Against all predictions it looks like Solar PV in the UK is very much alive and kicking.

Cardew

Agreed.

'A Shade Greener' apparently will continue fitting systems when the FIT for Rent a Roof companies is down to 16.8p/kWh, and obviously make a profit.

So for a private owner at 21p/kWh, plus £70 or so shaved off an electricity bill, it will still be a reasonable long term investment at those system prices

grahamc2003

The_Green_Hornet wrote: »

As expected, the recently announced FIT reduction has had the desired effect in slashing the installation costs for Solar PV systems installed after 12th December.

Tescos have already announced a 3.84 kWp system for the miserly sum of £8,499 (inc. VAT) and I fully expect prices to drop further next year as competition hots up within the industry and profit margins are squeezed.

Against all predictions it looks like Solar PV in the UK is very much alive and kicking.

The last sentence is a bit premature, what do you base it on?

How many orders have tesco taken for systems to be installed post dec? I expect there to be a massive dropoff in orders from now, with a gradual pick up in orders over the coming months. I'd expect plenty of current solar company directors will close their companies and have a few months relaxing, then form new companies to meet the demand in the runup to the next fit drop in apr 13.

I expect the rar scheme will be very lucky to survive at all (for new installations) at their new lower fit rate.

SallyKing

Read this on another forum:

"1. We are currently installers on a similar "free to home" solar pv schemes and after reading the DECC consultation the "funders" of this scheme seem to think that the feed in tariff for what is termed as multi installations will be untouched until after April 1st 2012. The wording on this matter is, in my opinion, a bit vague but we have been promised installation work until April at our current rate and it would make sense to allow all local government, social landlords and housing associations to be allowed extra time to complete all of there projects and make the most from feed in tariff and meet latest codes for their properties.

2. We have also been advised that if we wish to remain in the scheme after April 2012 we will need to cut our installation rates in half to allow for reduction in feed in tariff. Rates of return are linked to feed in tariff, cost of installation and cost of kit. Feed in tariff cant be altered so I suspect they will buy kit cheaper and pay installers less. We will not be installing at the lower levels and as pv is not our core business we will not be "chasing" work or working for nothing but I suspect that this will not be the case for many other installers where pv is their core business. I suspect many people will be installing for a very low amount and I suspect the quality of installations will also fall.

3. The paperwork and "red tape" involved in "free to home" systems is lengthy to say the least. Terms and conditions, cooling off periods, land registry applications, mortgage authority forms, business tenancy agreements and leases all need to be signed and processed before anything is installed. We find that it is about seven weeks from first visit to installation at the moment and the biggest time delays are with banks and building societies mortgage departments who are not concerned with any deadline that may exist elsewhere."


Personally, I dont think the rar companies will continue for long. When you look at their additional costs, overheads, tax, VAT at 20%, legals etc it must make a big dent in any savings they make from bulk buying.

Still, the downward pressure on prices is good.

Cardew

SallyKing wrote: »

Read this on another forum:

"1. We are currently installers on a similar "free to home" solar pv schemes and after reading the DECC consultation the "funders" of this scheme seem to think that the feed in tariff for what is termed as multi installations will be untouched until after April 1st 2012. The wording on this matter is, in my opinion, a bit vague but we have been promised installation work until April at our current rate .

I don't know who wrote that, but IMO they have got it completely wrong and the wording is not at all vague.

All installations after 11 Dec 2011 will only qualify for the lower rate of FIT(21p/kWh and 16.8p/kWh for Rent a Roof/councils etc)

However these new istallations will be paid the higher rate of FIT(43.3p/kWh) until April 2012 and then revert to the new reduced rate of FIT

The_Green_Hornet

grahamc2003 wrote: »

The last sentence is a bit premature, what do you base it on?

How many orders have tesco taken for systems to be installed post dec? I expect there to be a massive dropoff in orders from now, with a gradual pick up in orders over the coming months. I'd expect plenty of current solar company directors will close their companies and have a few months relaxing, then form new companies to meet the demand in the runup to the next fit drop in apr 13.

I expect the rar scheme will be very lucky to survive at all (for new installations) at their new lower fit rate.

The last sentence is based on the previous two and I think you are confusing your expectations with your desires.

Only time will tell who is right.

wuthton

SallyKing wrote: »

Personally, I dont think the rar companies will continue for long. When you look at their additional costs, overheads, tax, VAT at 20%, legals etc it must make a big dent in any savings they make from bulk buying.

Still, the downward pressure on prices is good.

These companies will be VAT registered so will be able to claim VAT back on all items that attract it. As they are giving the goods away they effectively get everything 20% cheaper than you or I.

bjohnson

It's all very well paying the higher FIT rate from December to April but you won't be generating much during those months

SallyKing

wuthton wrote: »

These companies will be VAT registered so will be able to claim VAT back on all items that attract it. As they are giving the goods away they effectively get everything 20% cheaper than you or I.

I thought it was only 5% VAT on solar panels for private individuals?

We pay 5%, rar companies should pay the full 20%.

Thats my understanding anyway.

wuthton

SallyKing wrote: »

I thought it was only 5% VAT on solar panels for private individuals?

We pay 5%, rar companies should pay the full 20%.

Thats my understanding anyway.

Yes, they will pay their suppliers VAT, but as VAT registered companies they can then claim it back.

It is why wholesale prices are displayed in a + VAT format because most companies effectively don't pay it.

SallyKing

Cardew wrote: »

I don't know who wrote that, but IMO they have got it completely wrong and the wording is not at all vague.

All installations after 11 Dec 2011 will only qualify for the lower rate of FIT(21p/kWh and 16.8p/kWh for Rent a Roof/councils etc)

However these new istallations will be paid the higher rate of FIT(43.3p/kWh) until April 2012 and then revert to the new reduced rate of FIT

Yes, a later post pointed out the error.