Feed in Tariff

 

What is the Feed in Tariff (FiT)?

The Government launched the Feed in Tariff on 1 April 2010 to replace the grant scheme. This is a payment for every unit of electricity that is generated by Solar PV systems. The FiT is tax free to domestic households and index linked to inflation for both commercial and domestic installations. Who is eligible? All Solar PV installations under 5MW are eligible to receive the Feed in Tariff.

Why is the Government doing this?

The Government is a long way behind other European countries on commitments to reduce carbon
emissions. Solar PV Installations are one way that it can catch up. The UK currently produces 5.5%
of it’s electricity from renewable energy sources but this is expected to rise to 30% to help meet the
2020 target.

Feed-in tariffs have been introduced successfully in many other countries and are proving to be
extremely popular because, as well as the benefits to the planet of microgeneration, it is also a
sensible and profitable financial investment. The FiT has encouraged huge growth in PV installations
and also created many jobs around the world.

 

How much will I get?

You will actually be paid in three ways!

Firstly, you will receive the FiT at the following rates (as at 1st April 2012):

21p per unit for systems up to 4KWh.

16.8p per unit for systems 4 – 10KWh

15.2p per unit for systems 10KWh – 50KWh

12.9p per unit for systems 50KWh - 250KWh

Secondly, a 3.1p bonus will be paid for every unit of electricity exported to the national grid.

Thirdly, you can use all the electricity you generate (thereby reducing your electricity bill) and STILL

receive the FiT.

Remember – for domestic installations, the FiT is TAX FREE and INDEX LINKED

The 2010 – 2011 increase was 4.8% (ie adjusted by the 2010 Retail Price Index)

Once your FiT is agreed, it will not decrease.

 

How long will it last?

You will enter an OFGEM regulated contract with your electricity provider for 25 years for Solar PV installations.

 

Is VAT payable?

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

 

How is the income calculated?

We have to use a Standard Assessment Procedure which is set by the Government.

This takes into account the orientation of the panels, the angle of your roof and the size of the
installation in Kilo Watts. Once these facts have been established, we will be able to give you an
estimate which, so far, is proving to be extremely accurate.

Your Solar PV System HAS to be installed and connected by an MCS accredited installer, such as
us, to allow you to receive the FiT. This is to ensure that only the highest quality of work is carried
out on your installation and connection to the grid. On completion, we will process all the necessary
paperwork for you – including the Commissioning Confirmation Form which informs the Distribution
Network Organisation (NEDL for Northern England) that your system is live and is feeding into
the network. A system of less than 3.66 KW (i.e. an average domestic installation) does not need
advance permission to connect. Larger systems do need that permission but we will help you with
every step of the process.

 

What about current installations?

The Government has committed to paying the tariff to installations after July 2009. Prior to this date,
installations will earn a lower rate of feed-in tariff @ 9p/unit of electricity generated.