As part of its commitment to decreasing our reliance on fossil and nuclear fuels the UK Government has brought in a new Feed in Tariff, FIT (sometimes referred to as Energy Cashbacks) effective from this month, April 2010.
The Feed in Tariff obliges energy companies to pay a premium price to the energy generator (that could be you!) for ALL the renewable energy produced. It doesn't matter if the renewable energy produced is consumed at the owners property or exported back to the grid - every kWh of renewable energy produced will be paid for by the energy company.
This means renewable energy generators get a double benefit when using energy they have produced themselves; not only will they not be buying that energy from their grid supplier, but they will also be getting paid for producing it as well!
The Feed in Tariff is set at different rates depending on the type and size of the system installed. Solar Photovoltaics (Solar PV) is one of the most highly rewarded technologies with the Tariff rate set at up to a maximum of 41.3p per kiloWatt hour generated. The actual rate depends on the size of the solar pv system installed and whether it is retrofitted or part of a new build.
The Feed in Tariff has been set to run initially for 3 years and the rates drop slightly in the 3rd year (maximum for Solar PV falls to 37.8ppl). Bare in mind however that energy prices are likely to continue to increase over this period which may help to offset this planned decline in the payments.
Some rough headline figures to help you get a grasp on the potential benefits of installing a grid tied solar PV system :
- A typical 2.1kW retrofit solar PV system would return an annual income of £737.23 for the energy generated from the feed in tariff alone
- The payments continue for 25 years , long after the system has paid for itself
- The rates are set to rise with inflation annually
- Feed in Tariff income is tax free
- An additional tariff of 3p / kWh will be paid for energy fed back into the grid