The UK government has had several different types of schemes on offer to incentivise households to install solar panels.
This may seem like madness to some – why should the government have to pay people to save money on their electricity bills? The reason is that as a country, we are committed by international treaties, such as the one established at Kyoto, to cut pollution levels. Whilst individuals may not care much about their own carbon footprints, the government can take into account the damage we do to other people through our own pollution, and try to establish the level of pollution that is optimal for society. Establishing this quantity in the first place is very difficult – it seems intuitive that no pollution at all would be best. However, there are benefits to the processes that cause pollution. For example, if people in developing countries have access to cars, then they will cause pollution, but the advantage is that they can then afford to feed their families. Therefore, the benefits in these cases outweigh the disadvantages. However, at the other end, a family going for a drive for fun will harm the environment, and the enjoyment from doing so probably does not outweigh this, but the family do not care, although the government does!
There used to be a grant system in place, making solar panels accessible. However, this was removed in April 2010, and replaced by the Feed In Tariff, which applies only to photovoltaic solar panels.
The Feed In Tariff is a system under which any electricity produced by a solar energy system and not used by the household, is sold back to the main grid at a set rate per unit of electricity.
In economic terms, this payment system seems better. This is because it rewards households directly for each unit of electricity sold back to the main grid, which relates more directly to the reduction in carbon emissions than just the fact that the house has solar panels, because different panels have different efficiencies and so on. It also means that if households with solar panels are careful to reduce their electricity usage, they will be able to sell more back to the main grid, and so they will benefit financially.
The disadvantage, however, is that poorer households won’t be able to install solar panels. However, the 23, which was announced as going ahead only in October 2010, is a similar scheme, paying per unit produced for thermal solar panels rather than photovoltaic. These systems are much cheaper to install, costing about a third as much as photovoltaic systems, hence this has been a progressive step from the government.