Under the government’s feed-in tariff (FIT) scheme, you’ll be paid for every unit of electricity your solar PV system generates whether you use it or not and, in most cases, also be paid for the unused electricity you export back to the grid.
To date, the scheme has helped encourage over half a million home owners and thousands of businesses to install solar PV – a significant contribution towards the Government’s target of generating 15% of UK electricity demand via renewable energy sources by the year 2020.
However, in December 2015, after a lengthy consultation period, the Government confirmed that deep cuts to the feed-in tariff would be enforced for installations after 15th January 2016 due to over spending of the initial budget. Many of the bandings were also consolidated and new ones introduced. Nevertheless, despite the feed-in tariff cuts, solar PV is still a worthwhile investment from both a financial and environmental perspective.
What is the feed-in tariff?
The FIT was introduced in 2010 to incentivise homeowners and businesses to invest in renewable energy technology with guaranteed tax-free payments for 20 years. These payments, based on how many units (kWh) your system generates and exports, are also increased in line with inflation.
Our expert team will forecast your feed-in tariff payments (based on the current rates and your projected generation & export) and energy bill savings to demonstrate how many years it will take for your PV system to pay for itself and also your rate of return.
The generation tariff
The FIT has two elements, the first being the ‘generation tariff’. Your electricity supplier will pay you the current FIT rates – depending on the size of your system – for every unit (kWh) of electricity your system generates, whether you use it your or not.
The current generation rates are shown further down the page, together with the export rate which we explain next.
The export tariff
The second element of the FIT is the ‘export tariff’. For smaller systems under 30 kWp, your electricity provider will assume you only use half of the electricity generated, therefore exporting half of this back to the grid. Consequently, you will receive the current export rate for a quantity of electricity equivalent to half of your generation.
For system sizes over 30 kWp, it is a requirement that you have an export meter fitted to qualify for and receive export payments. You may also be required to pay an annual fee to your electricity supplier for the service. As solar PV systems are designed based on your electricity demand, the extra cost to install and administer metering doesn’t generally offer any financial advantage and we commonly advise against it. However, our expert team will assess each project individually and advise accordingly.
Feed-in tariff rates (valid 15/01/16 – 30/31/16)
|>250 – 1000 kWp
How often do the FIT rates change?
It is key to know that when you install a solar PV system, the current rate is locked in for the duration of your 20 year term, making you unaffected by future rate regressions.
Every 3 months, the tariff figures are reviewed therefore our advice is to install at the earliest opportunity to ensure you receive the current rate; these rates will only go down.
Regressions in the rates are triggered if the Government are satisfied by the number of installs Nationwide for a particular banding in the previous quarter. These periodic regressions aren’t too harsh and rates generally only fall by 3.5% although in extreme circumstances, this can be much higher. Similarly, if install numbers for a particular band isn’t satisfied, the current rate moves forward unchanged for the next period.
If a particular banding has been unchanged for 3 periods (9 months), this also automatically triggers a reduction in the next period.
Will my system be legible for the feed-in tariff?
For you to claim the tariff, your solar PV system must meet a few simple criteria. At Oakapple Renewable Energy Ltd, we ensure that you meet all of the requirements before proceeding.
Firstly, your installer must be accredited with the Microgeneration Certification Scheme (MCS) and your panels must also be MCS approved and new (i.e. not second hand or reconditioned).
Your energy supplier must also offer FIT payments – the ‘big six’ energy companies are legally obliged to make payments and many smaller suppliers have now opted in to the scheme.
Whilst not applicable to companies, solar PV installs can only be made on homes that have an Energy Performance Certificate (EPC) at grade D or above. If you are below this rating, the solar PV system may actually bring you into category D or above, which is also acceptable. Furthermore, homes must also meet minimum energy efficiency standards to claim the full tariff.
Registering for the scheme
Registering for payments is simple. Firstly, we will add you to the central MCS database before sending you a certificate to confirm that your system complies with MCS standards. Next, you will need to tell your electricity supplier that you would like to register for the FIT and send them a completed application form along with your MCS certificate and the energy performance certificate. We are here to support you with this process and the paperwork to ensure everything is completed.
Your electricity supplier will check your installation against the MCS database and add you to the Ofgem Central FIT Register. They’ll also let you know when they need you to give meter readings, and tell you when to expect payment.