The Solar Feed-in Tariff explained

The Government 'Feed-in Tariff' for solar photovoltaics was introduced on April 1st 2010, to provide a guaranteed income for owners of solar photovolataic systems. The aim of the Tariff is to speed up the deployment of solar technologies, in order to drive down the costs of the equipment by achieving greater economies of scale.

As a home owner, there has never been a better time to install solar PV.

The Feed-in Tariff replaces the Government grants which were available before April 2010.

Let's look at an example:

Mrs Jones used to spend £600 on electricity every year.
Then she installed a 3kWp solar PV system, costing roughly £16,000.
The solar generates 2550 units of electricity every year.
Mrs Jones now gets paid £1,053.15 every year for the energy she generates.
The solar produces roughly half of her electricity, so she saves £300 per year.
Plus she exports half the energy the system generates and gets paid (1225 x 3p) £33.75 every year.
So, in total Mrs Jones' combined income and savings is (1053.15 + 300 + 33.75) £1,386.90 every year.
This means the system will have paid for itself in 11.5 years.
But Mrs Jones will carry on making money for the rest of the 25 years, giving her a tidy profit of £18,672.5 over 25 years.

The example above assumes Mrs Jones is paying 13p/unit for her electricity and that it never goes up in price over the 25 years, there is no inflation and her panels make 850 units/kWp/year. All of these assumptions are extremely conservative, in reality Mrs Jones is likely to make more than £18,672.5 profit over 25 years.

Income from the Feed-in Tariff is tax free and index linked, meaning it will go up with inflation. If you sign up in before April 2012 you will receive the 41.3p rate for 25 years guaranteed. If you sign up after that date you will receive a slightly reduced rate for 25 years so it pays to get solar installed as soon as possible.

If you have any more questions about how the solar Feed-in Tariff works, or would like a free, no obligation quote for your property please Contact Us, we will be more than willing to help.

Read what the Energy Saving Trust say about the Feed-in tariff.