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Solar Feed-In Tariff – Can you profit from the Feed-In Tariff?

Solar panel installationThe Feed-In Tariff, also known as FIT, became available in the UK on April 1 2010 and is the electricity sector of the Clean Energy Cash Back scheme – a Government-backed scheme that pays people who create their own electricity using green technology including solar PV panels.

The Feed-In Tariff guarantees a minimum payment for all electricity generated by the system, as well as an additional payment for the unused electricity produced that can be exported to the grid, known as the Generation tariff and Export tariff respectively. These payments will boost household savings as bills will be reduced by using electricity generated on-site.

The tariff is available to everyone – households, landlords, businesses and even communities and organisations like schools and village halls – and will be overseen by Ofgem which regulates the electricity and gas markets in Great Britain.

How much money could I receive?

The amount of money you receive depends on the type and size of the system you use to generate the renewable energy. If you’re installing solar PV panel technology you will receive up to 12.47p per Kilowatt hour available for all new installations – click here to see the official tariff levels table for all renewable energy technology.

As well as the payment you receive for generation, an extra 4.85p per Kilowatt hour of electricity produced that is exported to the grid will also be received, taking it to a total of 17.32p/kWh.

To calculate the potential payback from installing a solar PV system use the Solar Guide Solar PV Feed-In Tariff Calculator to estimate your annual income and overall investment payback time.

When is the Feed-In Tariff available and for how long?

The Feed-In Tariff was opened and payments were made available on 1 April 2010. All systems that are eligible under the scheme now qualify for receiving the tariff. And the best news for anyone considering installing solar PV panels is that the tariff will be available for the longest period of time with this technology. Solar PV tariffs were originally set to run for 25 years, while most of the remaining technologies benefit from 20 years of payments. However a reduction in tariff rates also included changes to the length of the scheme. New solar PV installations will be reduced to 20 years, falling in line with the other technologies.

What limitations are there and am I eligible?

Anyone who installs a renewable electricity system with a capacity of five megawatts or less is eligible to receive the Feed-In Tariff. The five megawatt system can be used on a single property for a householder or business or used collectively by a community.

Solar PV isn’t the only technology that qualifies for the tariff – wind turbines, hydroelectricity, anaerobic digestion and micro-combined heat and power systems (Micro-CHP) all qualify too – but it is expected to be the most popular renewable alternative in the UK.

The tariffs available and the process for receiving them varies depending on when the technology was installed and if you followed the guidelines of using an installer certified under the Microgeneration Certificate Scheme (MCS*).

To qualify for the full Feed-In Tariff payments you must have either had the technology installed between 15 July 2009 and 31 March 2010 and transferred to Feed-In Tariff before April 2010 or have the technology installed after 1 April 2010 using a certified product and installer.

From 1 April 2012 the Government also introduce new domestic energy efficiency requirements for solar PV systems. It means that if a property doesn’t meet at least an energy efficiency rating of D the Solar PV installation will only be eligible to receive a lower tariff rate of just 6.16p/kWh.

Feed-In Tariff Case Study

* The Microgeneration Certification Scheme (MCS) is an independent scheme that certificates microgeneration products under 50kW and installers in accordance with consistent standards. Any commercial or larger scale systems, over 50kW, and all anaerobic digestion installations must apply directly through the Renewables Obligation Order feed-in tariff process for larger installations (ROO-FIT) process as they are not covered by the MCS.

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Further Reading

How does the Feed-In Tariff work?
What is the future of the Feed-In Tariff?
How do I apply for a Feed-In Tariff?
Is the Feed-In Tariff affected by inflation?

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