Feed-in Tariff

 

What is the Feed-in Tariff (FIT)?

The UK Government launched the Feed-in Tariff on 1 April 2010, this is a premium payment for every unit of electricity that is generated by small solar photovoltaic (PV) systems.  This replaced the LCBP government grant schemes. The Feed-in Tariff is tax free to domestic households.

Who qualifies for FIT?

All PV installations under 5 MegaWatts (5MW), private and commercial are eligible.  On the commercial side, the feed-in tariff will encourage photovoltaic (PV) installations among rural areas especially impacting farming and rural businesses, small and medium enterprises.

 

What are the microgeneration tariffs for PV systems?

 

 

How much will I earn from 1 April 2011 with the FIT scheme?
includes increase due to adjustment by the 2010 retail price index of 4.8%
43.3p per unit for systems up to 4kWh (37.8p for new build PV systems)
37.8p for systems 4 - 10kWh
32.9p for systems 10kWh - 100kWh
30.7p for systems 100kWh - 5MW
9.4p for systems accredited before 14 July 2009
Additional 3.1p bonus will be awarded for every unit of electricity exported.

How much will I earn from 1 August 2011 with the FIT scheme?
The Government's plans to alter tariffs over 50kWp from 1 August 2011
43.3p per unit for systems up to 4kWh (37.8p for new build) 37.8p for systems 4 - 10kWh
32.9p for systems 10kWh - 50kWh
19p for systems 50kWh - 150kWh
15p for systems 150-250kWh

8.5p for systems 250 - 5MW

Additional 3.1p bonus will be awarded for every unit of electricity exported.

How long will I receive the payments for?
The Government has committed to pay the tariff for 25 years, this is usually the entire lifespan of the PV's that you install.

Will the tariff ever change?
The agreed tariff with the Government will not change. But the tariff's will be reviewed on aregular basis by the Government in order to encourage an early uptake of the PV systems.  It will increase each year in line with inflation (as defined by RPI).  The next feed-in tariff review in scheduled for 31 march 2012.  From 1 April 2012, the Feed-in tariff will then drop each year for future installations.

Why is the Government doing this?
The Government is way behind other European countries on commitments to reduce carbon emissions and to secure against future oil supplies. This is one way it can catch up. The UK currently produces 5.5% of electricity from renewables, this is expected to rise to 30% to meet the 15% 2020 target for all energy.

Feed-in tariffs have been introduced successfully in many countries around the world, including Spain and Germany.  It has encouraged huge growth in PV and created many jobs.

How will it be implemented?
Ofgem will administer the feed-in tariff. Suppliers will be responsible for paying the reward to their customers.

 

Is VAT payable?
VAT at 5% is payable on domestic installations.  New Builds are often VAT exempt, commercial buildings will pay standard VAT rates at 20%.

I need an example....
This is a feed-in tariff example for a 2.22kWp installation of 12 panels:

Cost of 2.22kWp system incl 5% VAT and scaffolding - Â£9708
Electricity savings from system output (assuming 50% used in house) 
if used in house - Â£133
Feed-in tariff on all generated electricity est 1906kWh @43.3p - £825
Electricity exported back to the National Grid @3.1p - £30

Total saving plus income/annum - £988
Return on Investment - 10%
Payback Time - 10yrs

We only use MCS approved/certified products and installers.