The coalition government has slashed the amount of money people can earn by selling back the surplus power they generate from solar panels after the subsidies which fund the scheme proved to be over generous.
Almost 90,000 solar installations took place between April 2010 and October this year as wealthier people able to afford the typical £9,000 start up cost signed up to be to get a 10% guaranteed TAX Free index-linked income for 25 years – a business proposition described by one participant as a ‘no brainer’.
A £1,000+ a year tax free income was possible as the scheme guaranteed to pay users 43p Kwh for energy (which would normally cost 11p) by adding a charge to everybody’s fuel bills.
But now, just as installation costs have plummeted to the point where poorer people can jump on the bandwagon, the government have announced they will slash the subsidy to 21p per Kwh as from December 12.
Existing agreements will be honoured, so those who already have systems in place will continue to receive their tax free handouts for the next quarter of a century, funded by les well off bill payers.
The Department of Energy and Climate Change claim that a 30% drop in the cost of installation meant that the subsidy had to be lowered to prevent too many people form taking advantage of it and that it was always the intention to cap the scheme.
Meanwhile homeowners who could not afford installation were able to rent out their roofs to installers and get free electricity but companies say the cuts will mean they can no longer offer to install panels for free for poorer households, in return for keeping the subsidies.
Daniel Green the CEO of ‘Home Sun’ told the Guardian:
“The cuts the government have cited are socially regressive,
Only the super wealthy with an eco-conscience will be able to wait now for a breakeven of 14 years on a solar investment.”
During the summer Eastleigh Borough Council had 288 solar PV panels fitted to the roof of Fleming Park at a cost of £185,000.
Ironically they were officially launched on August 1 – the same day that the Energy secretary, our MP Chris Huhne, cut the subsidy to large installations by 70% – making any similar future projects unviable according to many industry analysts.
Eastleigh Council say the energy generated by the panels will be worth up to £25,000 a year in income –or £625,000 over the course of the 25 year agreement – but failed to mention that this a subsidy which is coming out of residents energy bills.
One local resident, a 54 year old who did not wish to be named, reacted angrily to the news:
“This is blatant profiteering at the expense of local bill-payers. As far as I ‘m concerned solar subsidies are just another tax – this is not saving Council Tax payers money – it’s actually costing them.
Council Tax payers paid for the panels to be installed – now they have to subsidise the electricity they produce as well”