The Benefits of Renewable Energy Feed-in Tariffs
Through Renewable Energy Feed-in Tariffs there are financial, as well as environmental benefits for anyone in England, Scotland and Wales who installs an eligible low carbon, green electricity technology, such as solar photovoltaic (PV) panels and wind turbines. Just about everyone can benefit from the scheme including homeowners, tenants, businesses, schools, charities and farms.
In essence, you will be paid by your electricity supplier for every unit of electricity you produce. This is regardless of whether you use it yourself, or export it to the national grid - and the rate applicable at the time of installation will be guaranteed for a minimum of 20 years (or 25 years if you install PV systems), plus there is an adjustment for inflation.
The Feed-in Tariff actually consists of two tariffs: the Generation Tariff and the Export Tariff.
The Generation Tariff is where the main benefit is derived - you will be paid for each unit of electricity you generate from your Renewable Energy System (usually solar PV panels or wind turbines), whether you use it or not. Of course, any electricity generated which you do use yourself will mean that you will be avoiding buying electricity from your utility company, so reducing your bills.
The Export Tariff is simply an additional fixed income for every kilowatt-hour of electricity you generate and export back to the national grid via your electricity provider.
Note that the Generation Tariff applicable at the time of registration for the Feed-in Tariff Scheme will be the rate paid for 20 years (or 25 years for Solar PV). However, the fixed Generation Tariff rates for new entrants to the scheme will be reducing every year from April 2012. The government has set up this 'degression' to encourage you to install a Renewable Electricity System sooner rather than later. So to take advantage of the current rates, it's important that your system is installed before this reduction comes into force in April 2012.
A typical 2kW domestic solar electricity system, fitted on an existing property, generating an average of 1666kWh/year, could attract:
£688 per year, from the Generation Tariff (currently 41.3p/kWh)
£25 per year, from the Export Tariff (which is fixed at 3p/kWh)
£110 per year reduction in electricity bills
...giving a total saving of around £823 per year.
A typical house fitted with a Solar PV system on the roof would see an annual return of 7% to 8%.
Income from the Feed-in Tariffs is tax-free for householders, meaning additional savings for basic rate tax payers. Higher rate tax payers will save even more. Certainly a better rate of return than any building society or bank. And the Feed-in Tariff rates are guaranteed by the Government.
The Renewable Energy Feed-in Tariffs provide a win-win initiative. You will earn £s for generating electricity, reduce household energy bills by using the power you generate for your own use and therefore reduce your electricity bills ...and you will be paid for any electricity you don't use and export to the national grid. Plus, at the same time, you will be cutting your carbon footprint, by installing non-polluting technologies.
For a Solar PV or Wind Turbine to qualify for the Feed-in Tariff, the product and the installer must be certified by the Government's Microgeneration Certification Scheme (MCS). BritishEco is an MCS accredited installer. If you have already installed a renewable electricity system, you may be eligible to claim Feed-in Tariffs if this was done after the 15 July 2009.
More information
Find out if you could install a solar power or wind power system. Contact BritishEco, a Feed-In Tariff approved supplier
Further Reading
Frequently-Asked Questions about Feed-In Tariffs
Note: For renewable heat generation, such as solar thermal, heat pumps and bio mass (wood burning) boiler systems, the Government plans to introduce a Renewable Heat Incentive scheme in April 2011. This will work in a similar way to the Feed-in Tariffs for electricity - you will be paid for all the units of heat you generate plus you save money on your bills by not having to use as much gas or oil. This scheme is also applicable to householders in England, Scotland and Wales.
