Healthy returns still available for rooftop Solar PV systems

    OFGEM, the UK government body in charge of gas and electricity has recently announced that payments through the Feed in Tariff (FiT) scheme, are due to be reduced by 3.5% from 1st May 2013 for systems over 50kW’s.

    This subsidy, paid to suppliers of renewable energy forms a large part of the financial incentives available to landowners and investors.

    But all is not lost.

    This reduction is in fact likely to provide a degree of market security as installers can now plan when to install and at what price. Installation costs have also fallen over recent months, therefore ensuring that returns are still healthy, averaging between 10% - 14% (depending on size and site conditions) on self financed projects.  Systems under 50kW have had the FiT payments remain constant until 1st July and one could argue that there are few other opportunities in this economic climate that offer such returns!

    Once installed, the FiT rates are fixed and RPI index linked for 20 years therefore ensuring that investors have the security and incentives required.

    The returns can be maximised by the usage of electricity either by the occupants of that specific building or possibly by other neighbouring properties. Electricity can be used by the owner occupier therefore mitigating escalating electricity costs or sold to tenants of that building providing a guaranteed rate for that occupier and return for the landlord     

    Savills Energy has recently assessed a number of systems installed in 2012 as part of a national portfolio review. The results show that these systems have over-performed by between 6% and 18% which identifies the significant potential in Solar PV, even in dull and wet year! The South of England benefits from higher than average light levels making it the ideal location for Solar PV systems. 

    Due to the above we are expecting so see a significant increase in solar installations throughout the South of England, making now an ideal time to consider investing.  Savills energy department is promoting such installations on agricultural and commercial properties alike.  Our strong brand and reputation enables us to negotiate with a number of installers on the owners’ behalf, gaining a number of benefits - including greater warranties, performance guarantees and, most importantly, lower capital outlay.