The Department of Energy & Climate Change has announced the long awaited Feed in Tariffs Effective from 1st April 2010.

Receive payment for producing electricity at home with ‘Feed in Tariffs’.

You may have considered installing a renewable energy system before, but decided it was too expensive. Well things have changed. Not only is it now possible to save money on your energy bill but you can make a profit as well!

Under the Government’s new Feed in Tariffs (FITs) scheme, owners of qualifying* renewable energy systems are eligible to be paid for every kilowatt/hour (kWh) of electricity they generate. The payment applies even when the electricity is consumed on site or sold back to the National Grid. This is a UK Government incentive scheme written in law designed to reward people for helping meet the UK’s renewable energy targets. Payment is guaranteed for every kWh of electricity you generate for a period of 25 years and payments are index linked as well!

Cut your energy bill.

Depending on size a domestic PV system can produce part or all of the electricity used by the household each year. Factor in the rising costs of energy and the potential savings are clear.

Sell your electricity back to the Grid.

Even when you’re at work or on holiday – your solar PV system will still be generating electricity. This surplus will automatically be fed back into the national grid earning you credits from your energy supplier.

Increase the value of your property.

Investing in a home PV system could increase the value and saleability of your home.

*Only approved systems installed and accredited under the Microgeneration Certification Scheme (MCS) are eligible.

Department of Energy & Climate Change (DECC) Feed in Tariff Illustration.

Illustration of potential electricity flows for an on-site generator

  • In this diagram, the site generates 2,500 kilowatt hours (kWh) per annum

(**3.125kWp) (Approx. cost £20,500.00 installed).

  • They use 1,500kWh of the electricity they generate (60%).
  • 1,000kWh (40%) is exported, because it is generated at times when the household does not use it.
  • The household uses a total of 4,500kWh per annum.
  • Therefore, they need to import 3,000kWh from their electricity supplier.
  • Using the official, ***41.3p/kWh tariff, the generator will receive a FITs payment of £1032.50 per annum (2500kWh x 43.1p) for the electricity they generate.

**Based the installation, generating 800 kWh per kWp

***FIT for retrofitted system 41.3p/kWh. (FIT for new build is 36.1p/kWh).

  • They will also receive a payment for the electricity they export; assuming a price of 4p/kWh this would be £40.00 (1000kWh x 4p).
  • They also derive a benefit from the 1,500kWh they generate and use on-site as that will offset 1,500kWh they would otherwise have had to buy from their electricity supplier. Assuming an import price of 14p/KWh this would be a saving of £210.00 (1500kWh x 14p).
  • Total of £1282.50 income and savings per annum.
  • Payback would be in 16 years.
  • Providing a profit of £11,562.50 over the 25 year period.
  • All this is without including any increase in energy price over the period, or that the FITs are in fact indexed linked, factor in even modest rises and the savings/profits become even more attractive.