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Feed In Tariff Scheme

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Feed In Tarriff Scheme - An Introduction

Get paid to produce electricity through solar panels for the next 25 years.

In July 2009, Ed Miliband, the secretary of state for energy and climate change, announced that households would be encouraged to generate their own power through a clean energy cashback system, under which they would be paid for any power they produce whether they use it or not.

Solar feed in tariffs will come into effect in April and will pay for the electricity households generate through solar panels or a wind turbine. Under the plans, homeowners will be paid up to 36p for every kilowatt hour (kWh) of electricity produced using solar panels.

Darling added to this in last Wednesday's pre-budget report, announcing that these feed in tariffs, worth an average £900 a year, would become free of income tax.

If electricity is exported back to the National Grid when the homeowner is away, for example an additional 5p per kWh is paid, while savings are still being made on electricity bills.

The Treasury claims this will save households paying basic-rate tax of £180 in 2010 but this is nonetheless small beer compared with the cost of installing a solar panel, which can be as much as £10,000, according to Sharp Solar, the UK's largest solar panel manufacturer.

It said that the pay-back time for solar panels the time it takes to recoup an initial investment of £10,000 would shrink from 14 years to 10 as a result of the measures.

Who qualifies for Feed in Tariffs?

Homeowners who have a PV electric solar panels fitted on or after July 2009 and have a 4kWp or smaller system will qualify for the feed in tariff scheme.

Ofgem will administer the scheme and electricity suppliers will be responsible for paying the reward to their customers.

How much will I earn?

Retro fitted photovoltaic (PV solar panels) systems of up to 4kW for existing homes will earn the highest initial payments, 41.3p per unit (although this declines over time). Lower rates, up to 36.1p, apply to new-builds and larger setups. A typical 2.5kW well sited solar PV installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.

The money that you receive will be dependant on the size of system you have fitted but the government estimate you will receive between 7 – 10 % return on your investment.

Why are the Government doing this?

The UK government have been set targets to meet and have made commitments to reduce carbon emissions and secure future energy supplies. The most effective way of doing this is to make small scale renewable energy an attractive proposition for householders. By giving a generous return on investment it is hoped this will initiate a speedy take up of solar electric. The initial Feed in Tariff rate of 41.3 pence will be available for a limited period in order to incentivise homeowners to enter the scheme sooner rather than later.

Will the amount you earn change?

The Feed in Tariff Scheme will be indexed linked, which means the rate will rise in line with inflation so the tariff you receive will not be devalued over time.

Government Guarantee

The UK Government will guarantee your Feed in Tariff scheme for 25 years. This leaves plenty of time for you to realise the return on your investment. This also highlights the necessity to act quickly as the higher rate tariff will make payback significantly quicker over 25 years. This guarantee of long term income also adds weight to the belief that investing in solar power may add value to and improve the saleability of your property.

Where’s the catch - The Feed in Tariff scheme has to be paid for some how

The answer is that the government are not directly funding this scheme but will be raising funds through a general increase in electricity prices to the standard consumer. This works in a similar way to the current climate change levy which is added to our bills at the moment. The scheme has been devised to prompt individuals to act quickly and install renewable solar energy whilst it makes financial sense. The scheme ultimately rewards earlier adopters of pv solar the most and later adopters the least.

TIP: Over 3,000 solar energy systems were installed in the UK in the past month. To find out if your property - residential or commercial - is suitable for a solar energy installation we recommend that you book a FREE Solar Survey or use our Enquiry Form to compare prices for a Solar Panels Installation.

Customer Support

If you need help to post an enquiry or to arrange a solar panels survey and would like Price Devils Customer Service Team to talk to a human rather than completing an inquiry form, you are welcome to give our Customer Support Desk a call or send us an e-mail and we will be happy to give you a call back. Mon To Sat 8am to 7pm

Tel: 0871 5989 529
E-mail: support@solarpanelssupermarket.co.uk

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Feed In Tariff Scheme Solar Panels Supermarket: Compare costs for Solar Panels Installation to Residential & Business Property Nationwide...

Feed In Tariff Scheme

Solar Panels Supermarket: Compare costs for Solar Panels Installation to Residential & Business Property Nationwide...