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Investors in Solar PV Systems Benefit from Feed-in Tariff

Feed In Tariff

Since the introduction of the Feed-in Tariff (FiT) in April 2010, home owners, commercial property owners and communities installing solar PV are paid for all the electricity they generate, including the electricity that they use. This 'clean energy cashback' for retro-fitted installations up to 4kW is currently 13.88 pence* per kilowatt hour (p/kWh), for example, and is in addition to the savings on electricity bills. 

The Department of Energy and Climate Change (DECC) has introduced the Feed-in Tariffs as part of the UK Government's drive to reach the target of 15% of energy coming from renewables by 2020.

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

Generation tariff

A set rate paid by the energy supplier for each unit (or kWh) of electricity you generate -including those that you use on site. Once your installation is commissioned and you join you will continue on the same tariff for 20 years. 

The following rates apply for installations on or after January 1st 2015 and before 1st April 2015, subsequent rates (shown in brackets) apply to installations on or after 1st April 2015 and before the next digression on 1st July 2015.  

Any system up to 4kW new build or retrofitted = 13.88p* (13.39) per kWh pay-back
Any system 4-10kW new build or retrofitted = 12.57p* (12.13) per kWh pay-back
Any system 10-50kW new build or retrofitted = 11.71p* (11.71) per kWh pay-back
Any system 50-150kW new build or retrofitted = 10.34p* (9.98) per kWh pay-back

Any system 150-250kW new build or retrofitted = 9.89p* (9.54) per kWh pay-back

Any system greater than 250kW and stand alone (not attached to a building and not wired to provide electricity to an occupied building) = 6.38p (6.16) per kWh pay-back

*Tariff rate based on EPC band D or higher, rate drops to 6.38p per kWh for band E or lower.

Export tariff

You receive a further 4.77p/kWh from your energy supplier for each unit you export back to the electricity grid - those that are not used on site and are surplus. Domestic FiT installations are likely to have their export estimated at 50% in most cases until smart meters are rolled out.

Energy bill savings

You make 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.

Clean Energy Cashback

As an example, a typical domestic solar PV system, with an installation size of 4.0kWp could earn around:

System Specification

4 kW producing 3,500kWh/year
FiT generation rate: 13.88p/kWh
FiT export rate: 4.77p/kWh
Grid price: 14.5p
System cost: £6,000

Savings and returns with Feed-in Tariff from 1st January 2015*

FiT generation payment: 3,500 x 13.88p= £485.80
FiT export payment: (3,500 x 0.5) x 4.77p = £83.47
Annual bill savings: (3,500 x 0.5) x 14.5p = £253.75
ROI: (£485.80 + 83.47 + 253.75) ÷ 6,000 x 100 = 13.72%

*Assumes 100 percent efficiency, a south facing roof and 50/50 split between own use and export.

 See also more on the Renewable Heat Incentive (RHI)

Contact us today and find out how you can save on your energy bills or call us on 0845 301 3121

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