If the government offered to pay you £1,000 a year for the next 25 years, in return for an up-front investment of £12,500, you'd snap it up in a second. Well, that's pretty much the deal on offer this week after the government finally revealed what it will pay those who install electricity generating solar panels – in and around their homes – through the new “Feed-in Tariffs” (FITs).
After years of campaigning by environmental groups – helped in small part by this newspaper – the government has finally agreed to reward households and businesses installing electricity-generating measures with enough of a return to make it a serious financial, as well as an environmental, investment. If you've got the money (which is a big “if”) and, crucially, a sunny, south-facing roof, you can earn a 7%-10% tax-free return, an income that will rise in line with inflation. At the same time, you get to do more than your fair share in reducing the UK's carbon emissions.
In the week that the energy regulator, Ofgem, warned the nation to expect 20% electricity price hikes by 2020, and warned future supplies were in jeopardy, investors in solar panels will have the added benefit of being a net provider of electricity, and largely insulated from future price hikes that could see household bills top £2,000 a year by 2020.
