Feed-in-Tariff (FIT)
In moves that indicate the government’s seriousness of intent to increase local micro-generation via renewable, or “green” energy installations, the Feed-in-Tariff initiative was announced during 2010 and makes the decision to go green a no-brainer.
Starting as of April 2010 the proposed new tariff will pay for all energy generated by microgeneration systems like small wind turbines and solar photovoltaics, irrespective of if you use it yourself or sell it back to the grid. The amounts paid are in addition to any saving you will make by purchasing less electricity from your supplier and any income you earn from selling your surplus power to your electricity supplier.
The rates that have been announced are significantly higher than previously proposed:
The feed-in tariff will be set at 41.3p/kWh for a typical domestic scale solar PV installation and 26.7p/kWh for small wind turbines. These rates will be index linked to inflation over the life of the scheme (25yrs).
It was confirmed that there will be no income tax for home owners on revenue from the feed-in tariff, providing the energy generated is used mainly by your own property.
What does this mean in hard cash?
Obviously every building is different and offers different challenges and opportunities, so the following figures are rough guidelines only.
For Solar Photo Voltaic panels, the feed-in tariff for electricity generated and fed back into the grid is between 36– 41p per kilowatt hour generated (depending on the type & size of installation). As an example of what this might mean in a typical 3/5-bedroom house with a 3kWh installation generating 2300 kWh per annum – and costing initially around £12,000 to install – the value of the electricity generated, which is effectively discounted against the power actually used, is likely to be in the region of £1,000 per year.
For a simplified illustration of how installing a heat pump or solar panels can be repaid through reduced energy bills, click here.
Microgeneration Certification Scheme
