What do the new generation of solar tariffs mean for you?

No sooner had the government axed the solar Feed-In Tariff, than Octopus Energy stepped up with their own solar tariff – the first of its kind in the UK.

Octopus’ new product is set to revolutionise the home solar industry by offering homeowners a new way to earn money for the power they generate – maximising the value of their solar investment. Here’s what you need to know about the next chapter for UK renewable energy.

Solar energy

Solar tariffs – the latest developments

At the end of 2018, the Department for Business, Energy and Industrial Strategy (BEIS) announced that they’d be closing their Feed-In Tariff (FIT) to new applications. That tariff had been a key factor in the growth of the UK solar industry, because it incentivised homeowners and businesses to install solar by offering to pay a fixed price for every unit of power they generated.

The Feed-In Tariff itself was cut several times after 2010, and was worth very little by the time the scheme closed in April this year. At this point, the government announced a replacement scheme. Now, solar tariffs will be set by energy suppliers themselves at a level decided by the suppliers – not the government. Octopus Energy is one of the first companies to offer such a tariff to homes with new solar panels.

How do the new solar tariffs work?

It’s simple. You install your panels as before, and register your home with an electricity supplier that offers an export tariff. As part of their contract with you, the supplier will agree to ‘buy’ any solar electricity that you generate but do not use, sending that power back to the National Grid via your home circuit.

At the end of the month, your home electricity bill is reduced according to the number of units you sent back to the Grid, at the rate agreed in your contract with your supplier. This rate may be fixed, or go up and down according to the price of power on the electricity market.

What do the changes mean for solar owners?

First up, it’s important to note that these changes only affect new solar owners. If you’ve already got solar panels, you’ll continue to earn the same Feed-In Tariff and Export Tariff as before.

If you’re considering adding solar panels to your home for the first time, the new export tariffs are a way to earn money from your panels on an ongoing basis, in addition to the bill savings you’ll already enjoy. Unlike the old tariffs paid to solar owners, the new ones only apply to the energy you export – not the amount you generate.

But here’s the good bit. In opening up the solar export market to private energy suppliers, the government has kicked off a cost war. Energy suppliers will now have to offer the best possible export price to panel owners to keep their custom. If you’re a solar owner sending power to the Grid and don’t like the deal you’ve got, you can vote with your feet and sign up to a different supplier to earn more (within the limits of your contract, of course.)

Octopus is one of the first energy suppliers to join the race. Over the coming months, we can expect to see many more utility firms enter the ring. That can only be good news for the British solar sector, which is growing fast and last year generated as much as 25% of UK power during the summer months.

Where next for solar tariffs?

The new Octopus tariff offers a reassuring incentive for homeowners who are interested in solar panels, but who held off because of the end of the FIT. Yes, the new tariff only pays for the power you export, which makes calculating your potential savings a little harder than before. But the price of solar panels has fallen dramatically, which means that you’ll pay less up-front for a high-quality system.

Today, you could install a 4.5 kW system on your roof from only £4,995 including VAT, excluding scaffolding. In the summer, this system is capable of generating more than enough power for the average family home on a daily basis. And thanks to Octopus, any energy you don’t use will earn you a bonus at the end of the month.

If last year’s weather is anything to go by, us Brits have another 3 or 4 months of summer left to enjoy in 2019. And the new tariffs mean that the sooner you install your panels, the sooner you can start earning with them. The Octopus is renowned for being the cleverest creature in the animal kingdom. It might be the cleverest in the solar industry, too.

Find out how much you could save on energy bills with home and business solar PV. Call our team on 01803 732 946 or email [email protected] today. We look forward to hearing from you!