Under the Government’s existing feed-in tariff (FIT) scheme you will be paid for every unit of electricity you generate - whether you use it or not.
Since the scheme was introduced in 2010 it’s encouraged thousands of UK homeowners to install PV panels. And as well as securing strong financial returns through the tariff, you’ll also enjoy lower energy bills, protect your home from rising fuel prices and lower your impact on the environment. It all makes solar PV the ultimate feel-good investment.
How it works
The feed-in tariff is guaranteed by the government for 20 years. Payments are tax free (as long as you live in the property rather than rent it out) and will also increase in line with inflation.
If you have a solar PV system installed at home, you’ll benefit in three ways:
You will get paid for all the electricity you produce
This is called the generation tariff. Your electricity supplier will pay you the current FIT rates for every unit of electricity your system generates, whether you use it in your home or not. Currently the rate for small home installations (below 10 kWp) is 4.39p for every unit (or kWh) you generate.
You will get extra payment for the electricity you don’t use
Also known as the export tariff. You probably won’t use all the energy you generate, so what’s left over will be exported into the grid. Your electricity provider will pay you an extra 4.65p for 50% of the generated units. Most suppliers can’t meter this, so they assume you’ll use half the units you produce and pay you for the rest.
You will reduce your energy bills
Electricity generated by your solar panels will feed directly into your house, so it will power any appliances you’re using during daylight hours. As electricity prices continue to rise, this is a huge benefit for our customers. Lots of our customers save more by changing small habits, such as using the washing machine and dishwasher during the day instead of the evening.
Generation Tariff + Export Tariff + Bill Savings = Annual Benefit
A well-designed 2.88kWp system will receive feed-in tariff (generation and export tariff) payments of £435 a year, and save £177 a year on electricity bills. If the system costs £6,254 to install, it gets a return on investment of 9.78%. That’s before you take predicted energy price rises into account.
With returns like that, it’s no surprise many people are choosing to install solar PV systems as an alternative to investing their money with a bank or building society.
To claim the tariff, your system needs to meet a few simple criteria:
- Your installer must be accredited with the Microgeneration Certification Scheme (MCS).
- Your panels must also be MCS approved, and must be new – second-hand or reconditioned equipment isn’t eligible.
- Your system size must be less than 4kWp to qualify for the highest tariff rate. Most domestic systems are well within this limit.
- Your energy supplier must offer FIT payments. The big six suppliers – British Gas, EDF, E.ON, Npower, ScottishPower or Scottish & Southern Energy – are legally obliged to make payments, and many (though not all) smaller suppliers have opted in to the scheme.
- Since 1 April 2012, homes must also meet minimum energy efficiency standards to claim the full tariff. This is explained in more detail below.
- Energy performance certificates
- From 1 April 2012, only homes that have an energy performance certificate (EPC) at grade D or above will receive the full feed-in tariff
- EPCs give homeowner