Research Shows U.K. Solar Still Showing Good Return On Investment Despite Drop In FIT Rates


According to analysis produced by Green Business Watch, the rate of return on solar photovoltaic investments in the U.K. is significantly higher than when the scheme was designed, despite reductions in the feed-in tariff (FIT).

The U.K.-based renewable energy marketing and research firm reports that median installation costs for typical domestic solar panel systems have fallen by about 62% since 2010. The rate of return for a well-sited 2.6 kW solar installation has risen from an estimated 4.12% in 2010 to 7.81% in 2014, Green Business Watch says.

The study highlights the impact of falling installation costs and rising electricity prices over the last few years that have offset reductions in the FIT rate. It analyzes available cost data, together with FIT rates and electricity price data to compare costs and returns available from solar panels at various points during the period.

‘We wanted to compare how tariff rates, cost reductions and rising electricity costs have affected solar as an investment in the last few years, says Alastair Kay, editor of Green Business Watch. ‘It is pretty clear that well-sited domestic solar is providing really attractive returns, significantly above those when FIT started in 2010. A system that would have cost £13,000 in 2010 may be under £5,000 today, and that makes solar panels an option for more and more households, which is great.’

The full report can be found here.

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