Time's running out to install solar

If you're thinking about installing solar panels it's almost time to make a decision. The UK feed-in tariff (FIT), which rewards people that install renewable energy technologies, is set to decrease in April 2012.

It might seem like April 2012 is still a while away, but many solar installers are already getting booked up right through to next year.

If you want to qualify for the existing feed-in tariff rates, which for a domestic installation of up to 4kWp (kilowatt peak) is 43.3 pence per kWh (kilowatt hour or 'unit'), then the time to act is now.

Installations need to be fully installed, generating, commissioned and registered to claim the tariff before March the 31st 2012.

Bearing in mind that it takes at least a week to get most utility companies to answer the phone, getting them to acknowledge receipt of your FIT form, especially when everyone else is sending them in at the same time, may take longer than you think.

Any installation completed after 31st March will get a lower rate for 25 years, and as yet we do not know what those rates will be. Hopefully the government will stick to their word and simply reduce the rates by a few pence per kWh, meaning returns of at least 8% will still be possible. Based on past experience with the grant scheme however, it is highly probable they will do something completely stupid and mess up the scheme altogether.

Now that the price of solar panels has come down so much, especially since the beginning of the FIT scheme, it is an excellent time to install solar photovoltaics because the returns have increased proportionally.

For an upfront payment of £12,000, for a 4kWp system generating 870kWhs per year, it is now possible to make an 18% return on your money. That presumes you export 50% of the energy and use the other half in your home, that you are paying 13p/unit for electricity and that electricity inflation is 7% and general inflation is just 2%. These may well turn out to be very conservative figures, with some commentators predicting that electricity prices will rise by as much as 50% in the next four years alone.

Solar panel installers will probably carry on working even if it's snowing! But if you take out a couple of weeks for Christmas and a few weeks to get registered for the FIT, and include the fact that most reputable solar installers are booked up for at least two months, that really only leaves a couple of months to place your order and get an installation slot booked up.

If you live in a conservation area, or even near a listed building, you may well need planning permission too. If that's the case then you really need to get going because we all know how fast councils work.

If you're unsure if your home is suitable talk to an independent solar energy advisor or ask your local solar installer. But, make no mistake, the time to act is now if you want to secure the best feed-in tariff rates and protect yourself against electricity price rises.