Please note that this article is now out of date - it is however being left live as it shows what the thouight process in the industry was at the end of 2011. Please click here for up-to-date Feed-In Tariff Information.

The Scheme as set up by the Previous Government

All households who connected themselves to a government accredited solar energy system after 15 July 2009 have been able to feed back any surplus energy not used by themselves into the national grid and get paid a tax free rate of 41.3p per unit fed back in. This scheme, set up by the previous government, is called Feed-in Tariffs (FITs) or the Clean Energy Cashback Scheme. Households that installed a system prior to that date receive just 9p per unit fed back in.

What has happened with the new Government?

Nothing as yet. The rates were only ever guaranteed until 31 March 2012 anyway and it was always thought the rates would reduce over time. So for now the tax free payments have remained the same and are guaranteed until 31 March 2012 for any new installations. All systems installed since 15 July 2009 but prior to March 2012 have the rate of 41.3p guaranteed for 25 years regardless of any new changes that may be imposed.

And after 31 March 2012?

Any changes made in the review in 2012 will not take effect until 2013. It is likely the rates will be reduced, the thinking behind it is that over time solar energy systems will become cheaper to install overall and with higher fuel bills the savings for an individual with a solar energy system will balance out. The government reserves the right to bring forward the 2012 review if there is a stampede of households installing accredited systems to try and beat the date.

So cuts will happen?

It is likely to happen. It is thought that the government will create a trigger point that will make rates drop routinely as larger numbers of solar systems are installed. It is perhaps possible that the best time to install an energy system is sooner rather than later as the costs are unlikely to be as attractive and for such a long guaranteed length of time as now.