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See how Home Solar Panels can save you money on your energy bill whilst reducing your carbon foot print.

Not only will you save money on your energy bills but you will receive income tax relief on the money you make from the Feed In Tariff, allowing you to build a nice little nest egg courtesy of HMRC!

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Feed-In Tariffs and Solar Panel Grants

Solar panels can be a large up front expense. To help householders and business offset the costs and gain extra benefit from reducing their carbon footprint, the UK Government introducing the Feed-In Tariffs in April 2010. Prior to this there had been a limited number of free solar panel grants such as Warm Front Grants, but these were run more as part of a pilot scheme to assess which way of financing solar panels would be most successful with the public.

 

How Do Feed In Tariffs Work?

The Tariff is a payment system for anyone who owns a renewable energy system. The payments are made for every kilowatt hour that a system generates and prices are updated yearly and guaranteed for a set period of time – in the case of solar panels this is 25 years.

 

Size

Tariff (p/kWh)

Duration (years)

≤4 kW new build*

37.8

25

≤4 kW retrofit*

43.3

25

>4-10kW

37.8

25

>10 - 50kW

32.9

25

>50 - 150kW

19.0

25

>150 - 250kW

15.0

25

>250kW - 5MW

8.5

25

Standalone *

8.5

25

 

*Definitions:
 Retrofit - installed on an occupied building
 New Build - installed before building is occupied
 Stand-alone - not attached to a building or wired to an occupied building

 

In addition to a generation tariff, any surplus energy that you don’t need and feed back into the National Grid pays you an additional payment of 3p/kWh plus your own costs for electricity are reduced per unit by your electricity supplier. In effect the Tariff is a solar panel grant, but the grant is given to you every month over a period of years.

 

So anyone with solar panels will benefit three ways:

  • Income for generating renewable energy
  • Income for selling the surplus to the electricity supplier
  • Lower overall cost of electricity that is bought from the electricity supplier.

 

Give that the lifespan of modern solar panels is around 30 years with minor maintenance every five years or so, it is likely that the annual return over that period of time is about 8%, which covers your initial installation costs and pays you back 2-3 times i.e. if it costs you £10, 000 to install you will get back £20,000-£30,000 over the 25 years.

 

What solar panel systems are eligible for the Feed-In Tariffs?

Anyone who has solar panels that generates up to 5MW is eligible to receive Feed-In Tariff payments. The average solar panel installation on a domestic property is around 2-4kW, so 5MW is probably enough to power an entire village and makes virtually every property in the UK eligible.

 

How can you claim the Feed-In Tariff if you want to have solar panels?

To claim the Feed-In Tariff payments there are three rules you must abide by.

 

  • You must own the solar panels yourself. There are lots of schemes where you can have free solar panels fitted, but the Feed-In Tariffs for these will be paid directly to the installer as they own the panels and are ‘renting’ your roof space. To get the tariff payments you should pay for the panels and installation yourself.

 

  • The installer must be an accredited by the Microgeneration Certification Scheme (MCS). This is a quality assurance scheme that guarantees the installer that fits your solar panels is competent and qualified to do so. The last thing you want is to pay a great deal of money for a system that does not work properly or efficiently because someone has bodged the installation. If you install the panels yourself or get someone who is not MCS accredited, you will not get the Feed-In Tariff payments.

 

  • The equipment used must be approved by the MCS also. Substandard or inferior products will not generate the maximum energy needed for you to obtain a good return on your investment and it is not worthwhile to fit panels under these circumstances.

 

The Feed-In Tariff payments are index-linked

Every year inflation, also called the cost of living, takes a toll on the money we earn and the cost of items we buy. To ensure that solar panels continue to be regarded as worthwhile by their owners, the Feed-In Tariff payments are adjusted yearly to reflect the retail price index, which will take account of the cost of inflation so your income from the panels continue to stay around the same value. The scheme’s administrators, Ofgem, do this every year.

Measuring your output

The amount you are paid depends on how many kW your system produces. Most systems have a meter attached which monitors the output of the solar panels, but generally it is considered to be about 50% of the power generated by the system because you will use the other 50%.

 

While solar panel grants no longer exist, a better alternative – Feed-In-Tariffs  - have been introduced. This ensures you are paid for every kW of energy you produce, which in time will work out far in excess of any grant you could have been given to off-set the installation costs.

Want more information?

To find out more about the Feed-In Tariff and how you could financially benefit from having solar panels fitted to your property – even if you think you can’t afford to have it done – call one of our solar panel experts now on 0800 043 ****.