Leak points to solar subsidy cuts

The Department of Energy and Climate Change is expected to announce a cut in the feed-in tariff on Monday when it reveals future plans.

The draft paper, which the EST published on its site then swiftly took down, suggest payments could be more than halved from April 2012 for people install after 8 December.

Key Points

• Leak suggest huge solar savings cuts

• You may need to hurry for free solar

• Government to reveal plans on Monday

Howard Johns, managing director of panel installer Southern Solar, spotted the document this morning and linked to it on Twitter.

However, it is not clear whether the leaked information is accurate.

A spokesperson for the Department of Energy and Climate Change says: "We'll be publishing a full consultation on changes to the solar PV (the most common type of domestic panels) tariff in Parliament on Monday.

"The EST inadvertently published a draft of documentation on its website that was neither final nor accurate."

How much does solar save?

Solar panels can save the typical home £90-£180/year in electricity, according to the Energy Saving Trust.

However, the real draw is the Government guarantees that for 25 years you'll get a 'feed-in tariff' which means you're paid to generate energy, even if you use it yourself.

Over 25 years, these gains are extremely lucrative: the feed-in tariff scheme could currently pay back double your spend. For example, a £12,000 system could net £27,500 over 25 years.

However, the documents show solar feed-in payments could be cut from their current 43.3p per kWh to 21p per kWh, slashing typical earnings and savings from £1,190 to £640 a year. This would not affect those who have already signed up.

The end of free solar?

It could also mean the end of free solar, were you get the panels and electricity savings, but the company keeps the big feed-in gain, as companies may no longer be able to fund the panels if they make less from the tariff.

If you want to take advantage of solar (free or bought) you may need to hurry.

Yesterday, energy minister Greg Barker told the Solar Power UK conference: "You don’t have to be a Nobel prize winning economist to realise that solar is burning through the [feed-in scheme] budget at an unsustainable rate.

"This is a different world to the one in which feed-in tariffs were launched. In particular, we mustprovide value for money to bill payers.

"I cannot preside over a scheme which allows a solar panel installation in some of the least sunny locations in Britain to generate returns of more than 12%."

He added that from 1 April 2012 all domestic PV solar panels sites from April 2012 must meet minimum energy efficiency standards before they can qualify for the feed-in payments.