FEED IN TARIFF

Uk Government Proposed Changes To Solar PV Feed in Tariff

Feed in Tariffs (FITS) were introduced into the UK in April 2010 to incentivize both the domestic and commercial business sectors to invest in renewable energy such as Solar PV.
As from the 12th December 2011 the UK government is proposing to change the feed in tariff rates for all new solar photovoltaic(PV) installations as part of their comprehensive review consultation.
Any new applications submitted after the 12th December 2011 will receive the new tariff rate of 21p/KWh

Please note that this rate is still under consultation by the UK government until 23rd December 2011 and therefore is not final

New applications (on or after 12 Dec) will still receive 43.3p/kWh rate but only for the remainder of current financial year (up to 31 March 2012).
We recommend that customers use the new figures proposed in the consultation if planning for a new installation. The new tariff rate, although reduced, remains generous and is designed to provide house holders with a rate of return of between 4.5 – 8%

How the scheme works

If you are eligible to receive the FIT then you will benefit in 3 ways:

1. Generation tariff- a set rate paid by your energy supplier for each unit (or kWh) of electricity you generate.

Currently set at 43.3p p/KWh until 31st March 2011 and 21p p/KWh thereafter. This income is tax free and index linked to RPI, so will rise with the rate of inflation over the life of the tariff for a period of 25 years.

2. Export tariff- you will receive a further 3.1p/kWh from your energy supplier for each unit you export back to the electricity grid, that is when it isn’t used on site.

3. Energy bill savings– you will be making savings on your electricity bills , because generating electricity to power your appliances means you don’t have to buy as much electricity from your energy supplier. The amount you save will vary depending how much of the electricity you use on site.

Domestic FIT installations have their export estimated at 50%. This will remain until smart meters are rolled out across the UK.

Example of how the Feed-in Tariff works

As an example, a typical domestic solar electricity system, with an installation size of 3.92 kWp could earn around:

• £695 per year from the Generation Tariff @ 21p p/KWh
• £50 per year from the Export Tariff @ 3.1p for 50% KWh generated
• £200 per year reduction in current electricity bills based on 12.5p average import price.

This gives a total saving of around £945 per year.

This assumes 50% of the electricity generated is exported. The figure will vary depending on how much is exported.
See our Feed-in Tariff/Cashback Calculator to find out how much you could earn, and see the payback times.
This means that there has never been a better time for you to install a Solar PV system. Not only will you be significantly reducing your carbon footprint, you’ll also be reducing your energy bills and getting paid to do it!