Feed-in-Tariff
The Government introduced the Feed-in Tariff (FiT) to encourage the use of solar microgeneration. Under the FiT, anyone who installs an eligible, MCS Accredited, Solar PV system will receive a guaranteed fixed payment for all the electricity they generate, including what they use, for 20 years.
Despite media negativity about cuts to tariff levels, we have found that the Return on Investment (ROI) has increased since the early years of higher tariffs. This is becuase the global demand for solar has significantly reduced the up front installation costs. As such, even though the tariff rates are lower, the ROI is a very healthy 8-12%.
| Description | 1st May 2013 – 1st July 2013 Standard Tariff (p/kWh) | 1st July 2013 – 30th December 2013 Standard Tariff (p/kWh) |
|---|---|---|
| <4kW New Build | 15.44 | 14.90 |
| <4kW Retro Build | 15.44 | 14.90 |
| 4 – 10kW | 13.99 | 13.50 |
| 10 – 50kW | 13.03 | 12.57 |
| 50 – 100kW | 11.10 | 11.10 |
| 100 – 150kW | 11.10 | 11.10 |
| 150 – 250kW | 10.62 | 10.62 |
| 250kW – 5MW | 6.85 | 6.85 |
| Standalone | 6.85 | 6.85 |
• The FiT represents the payment made for GENERATING electricity. You are paid for whatever you generate, even if you use it all yourself. If you don’t use it all you will be paid an additional Export Tariff for anything you send back to the national grid.
• Solar PV will provide a very healthy return on your investment, 8-12%, Tax Free. For a basic rate tax payer this is the same as a high street APR of 10-13%.
• The payment for what you generate is Linked to RPI and so increases annually, protecting your investment from out of control inflation.
• The FiT payment is Guaranteed by the Government for 20 years, (although paid for and administered by the energy companies), making the FiT one of the most secure and reliable investments around.
• In addition to being paid via the Generation and Export Tariffs, you can also expect a significant Savings on Use element. For every unit of your free electricity you use, you will save the 12-15p / unit you would otherwise pay to a big energy company.
• Most installations are expected to pay for themselves within 7-10 years, leaving 10+ years of “in pocket” return on your investment.
• With global demand and and cuts to FiTs helping drive down initial costs, Solar PV installations are more accessible and affordable than ever.
Feed-in-Tariff levels vary depending on the scale of the installation. The table above details the Generation Tariff based on different installation sizes and types. The amounts shown will be paid for every unit of electricity your PV system generates, and does not encompass the additional payments under the Export Tariff.
The tariff levels in the table apply to installations completed from 1st Feb 2013 – 30th April 2013. From May 1st to July 1st 2013 the rates will degress only for installations larger than 50kW. From July 1st the rate will degress slightly across all tariff bands. It is possible to Pre-Accredit installations that will be completed after the rate cut to ensure they achieve the higher tariff band.
We recommend that anyone thinking of PV start as soon as possible to take advantage of these higher rates while available, though strong returns will still be in place after as the degression is minimal and installation costs continue to come down.
Degression is an element of the FiT Scheme whereby tariffs levels for new installations are owered over time. Degression of FiT Tariffs only applies to new installations, never to existing systems. Once signed up, the rate you receive at installation stays the same for the life of your FiT Account with annual upward adjustments in line with RPI.
All Generation and Export tariffs are linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation. The most recent adjustment in rate came into effect April, 2013.