Is now the optimum time to invest in UK solar?
The UK solar industry is about to enter its next phase. Since the introduction of the UK feed in tariff back in April 2010 the industry has grown at an exponential rate. The falling price of solar panels coupled with aggressive marketing by solar developers has seen Septembers solar installation exceed all expectation. This curve will only escalate as we get closer to the feed in tariff review in April 2012. However there could be a substantial drop off should the government decide to bring forward its feed in tariff review, as is looking increasingly likely.
The feed in tariff when conceptualized back in 2010 was never meant to be this profitable for developers or rooftop owners alike. A privileged owner of a south facing rooftop in the Devon or Cornwall can expect a return on investment well in excess of 15% pa rising with inflation. This would result in a payback period of some 7 years at very conservative inflation levels.
You will have seen adverts for free solar installations; funds, institutions, pensions and the like are all pouring their money into the sector trying to secure as much double-digit, inflation-linked, government-guaranteed income as possible before the good time ends … and I suspect these contracts will be changing hands for significantly inflated prices in the next 5 years given inflation rates.