Although slightly lower than it requested, the STA acknowledges that the 16p/kWh rate for domestic installations, which will come into effect from 01 August, will offer attractive returns to customers as installation costs continue to fall.
The STA’s chairman, Alan Aldridge, said: “We broadly welcome many of the government’s decisions for how solar PV will be treated in the FITs scheme; this should reassure consumers and solar companies alike that the government recognises and stands behind a major role for the solar industry.
“Despite the currently slow market, the industry can have some confidence that the new Tariffs are tight but workable. Householders should be reassured the new Tariffs will provide more attractive returns than can be found elsewhere today. The STA is now keen to work with government to get this positive message out.”
The STA remains concerned, however, by low PV installation rates but is pleased that DECC has scrapped any automatic digression and will instead review the Tariff at three month intervals with the option to delay further reductions if uptake is low.
Paul Barwell, STA’s chief executive, added: “The STA is pleased to have won its ask for quarterly reviews with more responsiveness to market size, and less emphasis on automatic tariff cuts.
“We remain very concerned that the market has stalled, and the recession certainly hasn’t helped. However, today’s announcement means we can now be confident that even when tariffs are adjusted on 1st August, solar will still offer attractive returns to consumers – certainly when compared to other investments currently available.
“It is vital consumers understand tariffs can come down because the costs of solar have come down – there is a faulty perception out there that cuts mean solar doesn’t pay. In fact, solar offers similar returns today as when the FIT scheme began because the industry has been so successful at reducing technology and installation costs.
“Furthermore, the relative income from a PV system is likely to be better than DECC suggests today because energy bills are set for another significant increase this year. So we expect to see more and more people turning to solar to save money, not just the planet. Today’s announcement should help restore confidence about the stability of the industry and Government’s commitment to the growth of this sector.”