Solar Electricity Panels (PV)- Feed-in Tariff

The Feed-In Tariff scheme guarantees a minimum payment for all electricity generated by the system, as well as a separate payment for the electricity exported to grid. These payments are in addition to the bill savings made by using the electricity generated on-site.Therefore once you have a microgeneration technology installed you should experience a monthly reduction in your electricity bill and then receive an income from your Feed-in tariff provider.

The scheme covers the following electricity-generating technologies, up to an installation size of 5 Mega Watts:

• Solar electricity (PV) (roof mounted or stand alone)
• Wind turbine (building mounted or free standing)
• Hydroelectricity
• Anaerobic digestion
• Micro combined heat and power (micro CHP) (limited to a pilot at this stage)

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. 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. The UK Government has targeted to reduce greenhouse gas emissions by 34% 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 finalised rates for the new Feed-in Tariffs, announced by DECC on 1st Februrary 2010, will give solar PV microgenerators higher rates than initially proposed.  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 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.

Note: Rates are shown in pence per kW. Year 3 rates are subject to RPI increases.