The Economic Benefits of the Feed in Tariff (FIT) and just what it’s all about? Save by producing solar elecricity
Investing in a Solar Days solar panel installation isn’t just about helping the environment and promoting green energy, it’s also about saving you and indeed making you money!
Before going into the detail, here are a few key economic benefits that you can enjoy from a Solar Days solar panel installation at a glance;
- The fuel (sunlight) itself is free
- You can reduce your electricity bills as you do not pay for the electricity you produce
- You can make excellent returns on your investment courtesy of the Feed in Tariff
- You may be able to obtain extra funding from your local authority by checking the Energy Saving Trust website
The Feed in Tariff (FIT)
Feed in Tariffs (FIT) became available in early 2010, and provide financial rewards for households and businesses generating their own electricity. In essence, the FIT system means that energy suppliers are obliged to make payments to households who produce their own electricity. This can take two forms
- An index-linked tax-free payment from your energy supplier, guaranteed for 20 years, for every unit of electricity you produce
- A payment from your energy supplier for the energy you produce but do not use, which is exported to the grid
As a result of the Feed in and Export Tariffs an averaged sized solar panel installation of 4kw and a south facing roof, you could be earning up to £800 a year! When you add this figure to the money you could save from not having to pay for the electricty you use day to day and would otherwise have to pay for, you could be looking at a much higher figure. Such an impressive amount reflects the fact that investing in a solar panel installation makes better financial sense than many financial products on the market today. Depending on your current tax bracket this represents about 9% (domestic) and about 17% (commercial) return on investment, and could see the system pay for itself in several years. After that, the profit is yours to spend as you wish! The best part about it all is that the payments come from the electricity companies and not the government, meaning you will be insulated from any government cut-backs!
Energy Rating Requirements
Please note that it is now required that domestic householders installing a solar panel installation will need to have an Energy Performance Certificate (EPC) with a rating achieving Band D or better. Solar Days can check whether your house already has such a rating, and if it does not, is happy to provide a service which brings your house up to the requisite standard! This may include a wide range of measures such as cavity wall and loft insulation.
Farm buildings and certain other commerical buildings do not have to meet this standard but have their own regime. Solar Days are happy to advise, to explain the rules and to assist you in complying with them when installing your solar panels.
In any quotation we provide, we base our forecast on the Microgeneration Certification Scheme (MCS) Standard Estimation Method. It must be highlighted that it is only possible to apply for tariff payments once the solar panels have been installed, and unlike grants, cannot be applied for and received in advance. As part of the full service Solar Days offers, however, our team will assist you in registering your solar PV array for the Feed In Tariff.
For solar arrays installed before 1st January 2014, the FIT rates are as follows:
- Up to 4kW - 14.90p per kWh
- 4-10kW – 13.50p per kWh
- 10-50kW – 12.57p per kWh
- 50kW – 150kW – 11.10p per kWh
- 150kW – 250kW – 10.62p per kWh
- 250kW and over – 6.85p per kWh
- Export Tariff – 4.64p/kWh
These tariffs will be revised by Ofgem from January 2014.
For more information please contact us on 01743 366555.