The Department of Energy and Climate Change (DECC) has confirmed that Green Deal finance can be used to part-fund the cost of installing solar PV.
How the Green Deal and Feed-in Tariffs works together sets out in detail how the two schemes work together following a period of uncertainty. According to the document, the amount of Green Deal finance available will depend on how much money a proposed solar array will save homeowners on their electricity bill. Crucially, even if the amount saved is not enough to fund the entire cost of the installation, Green Deal finance can be used to pay for part of the cost.
In order to calculate how much finance will be available under the Green Deal to fund the cost of a solar array, assessors will take into account the current ‘deemed’ 50% annual electricity consumption of a system alongside 50% exportation.
The document includes a worked example of how the combination of Green Deal and FiTs will work:
Solar Power Portal understands that DECC reconsidered the manner in which the Green Deal and FiTs interfaced following a number of concerns raised by solar installers during the recent series of industry roadshows organised by Solar Media.
The news will come as a boon to the residential sector, which has seen the level of installs dramatically drop following the FiT fiasco last year. The registration of imported Chinese solar products has also caused module prices to rise recently, further damaging the market’s prospects.
The availability of green deal finance effectively substantially lowers the upfront cost of purchasing solar PV – one of the largest barriers to uptake in the residential market. However, serious concerns remain over the interest rate after the Green Deal Finance Company (TGDFC) confirmed that the initial interest rate will start at 6.96% and rise to 7.96% for a 10-year loan.
Commenting on the factsheet, Paul Barwell, chief executive of the Solar Trade Association said: “This is a useful help sheet. It is great to see DECC using figures from our solar calculator, and it is of course helpful that solar PV is among the measures up for part finance under a Green Deal package, meaning that Green Deal assessors can help raise awareness of the benefits of solar. This puts solar within reach of more consumers, as long as they are willing to accept a slight reduction in return on investment.”