Your income comes from a Government backed scheme
Your Solar Electricity investment is “as safe as houses”!
Who pays me the money?
The Government backed Feed in Tariff scheme requires electricity suppliers to make regular payments to households and organisations who generate their own power from Renewable Energy sources such as Solar Electricity.
How is the FiT paid?
Your electricity supplier will either send you a cheque or make a direct payment of your Feed in Tariff into your bank account.
Who bears the cost?
Although the FiT scheme is a Government initiative, the cost is borne by the electricity suppliers. They will recover this cost through an increase in the amounts they charge consumers for electricity. Another reason for you to install Solar Panels if you are able to do so.
How is the Tariff payment calculated?
You get paid a generating Feed in Tariff for every kilowatt hour of electricity you generate, and an export Feed in Tariff for every kilowatt hour you don’t use yourself.
How much are the current tariffs?
Precise tariff rates vary depending on the size of the system (larger systems get a lower rate), the energy efficiency of the property, the number of systems already owned by a customer, and whether the Solar Panels are fitted to an existing property (retrofit), a new building, or placed on a stand-alone site. Further details are shown below.
An energy efficient residential home installing a system with a capacity of less than 4kW will gain:
- 30p for every kilowatt hour (kWh) generated and used (A generation tariff of 15.44p per kWh and a saving of an assumed 15p per kWh on your current electricity bill)
- 20p for every kilowatt hour generated and exported
(A generation tariff of 15.44p and an export tariff of 4.5p)
An energy efficient non-domestic property installing a larger retrofit system with a capacity of 8kW will gain:
- 27p for every kilowatt hour (kWh) generated and used (A generation tariff of 13.99p per kWh and a saving of an assumed 13p per kWh on your current electricity bill)
- 18.5p for every kilowatt hour generated and exported (A generation tariff of 13.99p and an export tariff of 4.5p)
Feed in Tariff Rates
These tariffs are paid for each unit of electricity generated, whether or not you use it. The rates for Solar Electricity for a new system installed and registered before May 2013 to a property with an Energy Performance Certificate (EPC) Rating of D or above are:
|Size and type of System||Feed in Tariff (pence per kWh)|
|<4 kWp (New build)||15.44|
|<4 kWp (Retrofit)||15.44|
New build relates to Solar Systems integrated in new buildings.
Retrofit relates to Solar Systems mounted on existing buildings.
Stand Alone relates to other Solar Systems installed primarily to feed power into the grid.
A property with an EPC rating below D will only receive a payment of 7.1p per kWh.
Reduced rates will apply where the claimant is the owner of multiple systems.
Export Tariff (for all types of PV system)
The export tariff is 4.5 pence per kWh
This tariff is paid for each unit of electricity exported back to the grid. Your electricity supplier can measure this by a meter, but in most cases it is likely that a deemed export amount of 50% will be used initially.
Both the Generating and the Export Feed in Tariffs are payable for 20 years and are index linked to inflation so they will increase each year.
Importantly, a press release in 2011 confirmed that the Government “will not act retrospectively and any changes to generation tariffs implemented as a result of review will only affect new entrants into the FIT’s scheme.”
Full Feed In Tariff list
The full Feed In Tariff list for renewable energy is available from OFGEM
For the latest information, see the DECC website.
Lower Feed in Tariff Rates will probably apply from 1 May 2013
- The precise rates will be announced beforehand based on the volume of installations registered in the previous period.
Future reductions in tariffs are planned over time in line with the uptake of FITs scheme
- Average tariff reductions of 3.5% every 3 months, reductions will be bigger (up to 28%) if there is rapid uptake.
- Tariff cuts will be skipped (for up to 2 quarters) if uptake is low.
- Uptake in 3 different bands (domestic (size 0-10kW), small commercial (10-50kW) and large commercial (above 50kW and standalone installations) will determine the quarterly reductions within those bands.