Feed-in tariffs

By installing a new photovoltaic system you can take advantage of the Government’s Clean Energy Cash Back scheme.  Beginning in April 2010, and running along the same lines as the feed-in tariffs in place in other countries, the result will be cheaper renewable energy.

Summary

The Feed-in tariff can be summed up as follows:

For a solar PV system that you have installed, for every unit of electricity you generate whether you use it or not, you will be paid 41.3p. Systems greater than 4kW get 36.1p; greater than 10kW get 31.4p up to 50kW.

If you use the electricity that you generate you will also save the money that you would otherwise have spent buying it.

If you don't use it you will also receive additional payment from your electricity company who will buy it off you.

The payment is guaranteed for 25 years.

For a system to benefit from the Feed-in Tariff, it must be installed by a company that is registered under the Microgeneration Certification Scheme

A fixed premium rate for renewable energy

Under the proposed system, small-scale energy producers will be offered a fixed, premium rate for renewable energy fed-in to the grid (previously, although some UK microgenerators received a payment for selling their electricity, this was not guaranteed). 

This energy is bought by the utility companies which are obliged under the legislation to buy the units of energy over a set number of years.  1.5 million households could benefit from this increased support for renewables. 

There will also be additional payments for exporting to the grid

An added bonus is that there are further payments for exporting surplus energy to the grid.

It’s an important component of the Low Carbon Transition Plan, which aims to turn the UK into a low-carbon economy.  At its core are legally-binding, five-year carbon budgets within which government departments will have to stay, much like financial budgets.   The target is a 34% reduction in greenhouse gas emissions by 2020.  Although cars, businesses and farming will be affected by measure, half the reduction will come from clean energy generation.

A legally-binding EU target already obliges the UK Government to generate 15% of its total energy needs from renewable sources by 2020, a figure which, if realised, will represent a ten-fold increase in renewable energy generation.

Rates for small scale Solar PV will be 41.3p/kWh

The finalized rates for the new Feed-in Tariffs, announced by DECC on 1st Februrary 2010, will give solar PV microgenerators higher rates than initially proposed.  Most notably, the rate for retrofit installations of less than 4 kW will be 41.3p/kWh, an increase on the 36.5p/kWh originally proposed by DECC.

The 1st February announcement also confirmed that tariffs are to be linked to the retail price index to ensure that income from them is in line with inflation.  For private individuals, the scheme will be free of income tax.

Although solar thermal microgeneration is not included in the FIT, the consultation period for the Renewable Heat Incentive (RHI) has begun.  Kicking off in April 2011, this scheme will guaranteed payment to homeowners who install solar hot water.  For more information on this, see our Renewable Heat Incentive page.

Decc (Department for Energy and Climate Change) Feed in Tariff information

Feed in Tariffs information site

 

Other resources

Energy Saving Trust : Lots of information about renewable energy

The Microgeneration Certification Scheme: How solar installers can be certified

Grumbletext: An example of forum feedback on a solar installer

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