Homeowners are increasingly turning to renewable energy options in the face of the upward trend in energy prices, according to an industry expert.
The interest in solar PV, energy efficient lighting, heat pumps and other forms of renewable technology coincides with the latest warning from Centrica – the owner of British Gas - that rising wholesale gas costs will make supplying energy to UK households more expensive this year.
Although British Gas announced a 5% cut in the standard electricity tariff in January, it followed a whopping 16% rise in electricity prices and 18% rise in gas prices for British Gas customers in August 2011.
David Hunt, a director with leading renewable energy company Eco Environments, said: “Although there is the occasional small price drop, the trend in energy costs is very definitely upwards. As a result, we are seeing an increasing number of homeowners and business owners looking to address their energy costs. The summer months are the best time to do this in order to avoid nasty shocks when the winter bills arrive.
“One of the most popular options at the moment is low energy lighting but there are a range of renewable energy technologies that people can harness to ensure drastic reductions in energy costs.”
Mr Hunt said that his firm was seeing a surge in activity from consumers wanting to cash in on the Government’s feed-in-tariff incentives for solar panels before they are slashed again on July 1.
As of July 1, the Government is slashing the feed-in-tariff subsidies available for domestic schemes of less than 4kW from the current 21p to an expected rate of 15.7p. It may even be as low as 13.6p.
Under the present FIT rate, the return on investment is more than 10 per cent and is index linked and tax free, fixed and guaranteed for 25 years.
However, when the rate reduces to 15.7p – or the 13.6p rate if deployment in March and April is between 150 and 200MW – the potential return on investment will drop to between 4 and 6 per cent.
Mr Hunt added: “This is the final chance for consumers to secure a fantastic return on investment if they go ahead with a solar PV installation before July 1.
“After this date, the FIT rate will drop dramatically to 15.7p and potentially lower still, which will make a domestic solar PV scheme appealing only to the really green investors rather than those who are coming at it mainly for the eye-watering financial returns. This truly is the end of the domestic solar PV market as we know it.”
Last year, the feed-in-tariff rate for domestic schemes under 4kW was slashed from 43.3p to 21p and, should the new rate fall as low as 13.6p this would amount to a 68 per cent fall in the rate since December. The rates are due to reduce further still in October this year.
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