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On April 1st 2010, the UK Feed-In Tariff for solar PV Microgeneration came into effect, making solar panel installation not only a sound ecological decision but also a solid investment with assured returns.
The FiT applies across England, Scotland and Wales and is designed to incentivise solar panel installation, by offering what is referred to as “clean energy cashback”. Essentially this means that homes and businesses implementing small scale low carbon energy generation through solar PV panels are paid for every unit of electricity that their system produces. This even applies if the households or businesses use all of the electricity they generate themselves or sell the power back to the grid for additional profit! The rates have also been set so that those generating electricity through solar PV will be paid well above the rate at which utilities companies sell electricity, to account for the fact that solar generated power is more expensive to produce than fossil fuel generated power.
How much you get paid will depend largely upon the type and size of the solar PV technology you use in your home. This table acts as a guide as to the pence per unit a new solar panel installation could earn.
Essentially, the price you will be paid per unit for energy you generate and then use yourself is presently 43.3p. For energy you generate and then export back to the grid (as opposed to using yourself) the payable sum per unit is approximately 46.4p – taking into consideration monies received from utility companies for the power you export back to the grid. More information about the Feed-In Tariff rates can be found detailed in the table below.
Tariff levels, for technologies installed between 15th July 2009 and 12th December 2011 of most significance to householders.
| Technology | Scale | Tariff Level (p/k Wh)* | Tariff Lifetime (years) |
|---|---|---|---|
| Solar electricity (PV) | ≤ 4 kW (retro fit) | 43.3 | 25 |
| Solar electricity (PV) | ≤ 4 kW (new build) | 37.8 | 25 |
| Wind | ≤ 1.5 kW | 36.2 | 20 |
| Wind | > 1.5 - 15 kW | 28.0 | 20 |
| Micro CHP | ≤ 2 kW | 10.5 | 10 |
| Hydroelectricity | ≤ 15 kW | 20.9 | 20 |
Definition of Terms
Retrofit: Panels installed on a building that is already occupied.
New Build: Installed on a new building before it is occupied for the first time.
Feed-In Tariff Eligibility
Eligibility for the UK FiTs depends upon the date of installation, size of installation and type of technology used.
Systems Installed After April 2010
Systems installed between April 2010 and 12th December 2011 are eligible for the Feed in Tariff rates as outlined in the above table, providing they are registered by an accredited body by December 12th. Once installation is complete, consumers should contact their supplier to begin receiving payments at the rates detailed above.
Systems installed after 12th December 2011
Feed in Tariff rates are presently at their highest ever level in order to motivate homeowners to invest in carbon neutral electricity generation. As it stands the government have proposed a reduction in FiTs to come into force after 12th December 2011 – but no final decisions have been made at time of writing. When a conclusive figure has been decided upon Solar Choice will re-evaluate pricing structures for solar PV systems to ensure a sustained high level of guaranteed return on investment. Please contact us for more information on this topic.
Why Will the Feed-In Tariff Decrease?
The idea behind cutting the tariffs considers a number of factors:
Motivation
The periodic reduction in FiTs is primarily to encourage people to act now. By acting now you will get the best financial return on your solar PV installation. This is an incentive to get more people to make the solar choice before sooner rather than later, assisting in ensuring that the UK meets its carbon emissions reduction targets.
Reduction in Costs
As with most innovative technologies the cost of materials gradually reduces over the time. Consultants acting on behalf of the government believe that the cost of materials associated with solar PV is likely to gradually reduce such that a reduction in Feed in Tariffs over time will not adversely affect return on investment.
Uptake Levels
Solar PV is growing rapidly in popularity – as such the cost of paying out Feed in Tariff sums is steadily increasing. In order to prevent governmental ‘overspending’ or an increase in utility bills, FiT rates need to be reduced as the number of solar PV system owners increases.
If you would like to know more about the UK Feed in Tariff and other benefits of domestic and commercial solar PV systems then please get in touch with our expert team using the enquiry form on the right.
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