The feed-in tariff in the UK: A case study focus on domestic photovoltaic systems

This paper explores the photovoltaic (PV) industry in the United Kingdom (UK) as experienced by those who are working with it directly and with consideration of current standards, module efficiencies and future environmental trends. The government's consultation on the comprehensive review for solar PV tariffs, proposes a reduction of the generation tariff for PV installations in the UK of more than 50%. The introduction of the Feed-In Tariffs scheme (FITs) has rapidly increased deployment of PV technologies at small scale since its introduction in April 2010. The central principle of FIT policies is to offer guaranteed prices for fixed periods to enable greater number of investors. A financial analysis was performed on two real-life installations in Cornwall, UK to determine the impact of proposed cuts to the FIT will make to a typical domestic PV system under 4 kW. The results show that a healthy Return on Investment (ROI) can still be made but that future installations should focus on off-setting electricity required from the national grid as a long term push for true sustainability rather than subsidised schemes. The profitability of future installations will have to be featured within in-service and end-of-service considerations such as the feed-in tariff, module efficiencies and the implications of costs associated with end-of-life disposal.

► Financial analysis shows the importance of the FIT scheme to the uptake of PV.
► The FIT has successfully created demand, helping bring down the cost of PV modules.
► The market needs stability to drive investments and support sustainable growth.