Feed-in Tariffs

Direct income from your renewable energy generation

Applicable to:
- Photovoltaic Systems
- Wind Power

Through a special initiative known as the feed in tariff (FIT) system, electricity produced by your
photovoltaic or wind turbine generation system which is in excess to your own requirements can be
sold back to the national grid.

The table below shows the proposed new FIT rates as of April 2012.  Solar PV installed after 12th December 2011 until 31st March 2012, will receive the current higher FIT rate until 31st March 2012.  Thereafter, from 1st April 2012, the proposed rates below will apply.

However, a new energy efficiency requirement from April 1st 2012 will mean that properties must reach a certain level of energy efficiency in order to receive the proposed tariffs. 

Technology Scale Tariff level (p/kWh) Tariff lifetime (years)
Solar electricity (PV) ≤4 kW (retro fit) 21  25
Solar electricity (PV) ≤4 kW (new build) 21 25
Solar electricity (PV) >4-10kW 16.8 25
Wind ≤1.5 kW 36.2 20
Wind >1.5 - 15 kW 28.0 20
Micro CHP ≤2kW 10.5 10
Hydroelectricity ≤15 kW  20.9 20
       

Once a system has been registered, the tariff levels are guaranteed for the period of the tariff and currently index-linked . For systems registered in future years, some tariff levels will be adjusted to account for expected reductions in system prices. For household customers producing energy mainly for their own use, the tariff income is also free from income tax.

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Photovoltaic Systems

Benefits based on the Consultation Paper (Nov 2011):

  • 5 -6 % return on investment
  • Pay back in full within 18-20 years
  • Payments continue to you for 25 years
  • Tax-free
  • Plus savings by reduction in your purchase of electricity from the national grid

 

The generation tariff level for a retrofit PV system of less than 4kWp has been set at 21p/kWh for
every unit generated, regardless of whether it is used in the home or exported to the national grid.
There is also an additional export tariff of 3p for the surplus units exported to the national grid.

FIT payments will effectively be made at the 21p/kWh level for the first 25 years of the
life of the PV system; these are, however, linked to the Retail Price Index.

It is also confirmed that the FIT income for domestic properties generating electricity mainly for their
own use will be non-taxable income for the purposes of income tax.

How do you calculate the income generated for PV?
The rate of income will be determined by the size of the system:

System Size
Payback per Unit
less than 4kwp 21p
4 -10kw 16.8p
   

Until Smart meters are introduced your electricity provider will assume you use 50% within the
home and sell the remaining 50% back to them. You have the option to have a meter installed by
your electricity provider should you wish to do so.

Most electricity providers are working on the following assumptions-based on a system of less
than 4kwp.

  • You will be paid 21p for every unit you generate regardless of whether you use it in the home or not.
  • You will be paid an additional 3.1p per unit (minimum amount - dependant on your energy provider) for 50% of the kwh generated as it will be assumed you sell this back to your electricity provider.  If you use more than 50% your saving will be greater.
  • You will save 14p per unit for 50% of the kwh generated, as you will not have to purchase this.

 

Example of income generated from on site generation:

Cost of electricity with no on site generation:
14p/kWh Import Tariff (purchased): 4,500kWh x 14p = £630

Income from electricity generated on site:
21p/kWh Feed-in tariff:  2,500kWh x 21p= £525
Saving on electricity generated and used in the home: 1500kwh x 14p = £210
3p/kWh Export tariff: 1,000kWh x 3p = £30

Income: £525 + £210 + £30 = £765

Annual income:  £765 (income from generation) - £630 (standard electricity costs) = £135

 

A new energy efficiency requirement from April 1st 2012 will mean that properties must reach a certain level of energy efficiency to receive the proposed tariffs. 

Insulation will be key...

 

Tips on insulation

It’s the single most important aspect of any building. And we can’t encourage it enough. The fitting
of lots of good quality insulation will save energy. Merely changing heating appliances from oil to a
heat pump for example is not the answer.
If there is no insulation in the walls or floors or roof of a building, then it’s advisable to fit it as soon
as possible. Many existing buildings (except some listed buildings) can become well insulated by
adding insulation on the inside of the walls, on the floors and in the roof.
Floors can be tricky: if there is no insulation then they really need to be dug up, though this is not
necessarily desirable or possible in period properties. Fitting underfloor heating then costs almost no
extra labour as the pipes are simply clipped to the top of the insulation before the concrete screed is
poured on.
Walls: cavity wall insulation should always be fitted to an older building wherever possible; this will
improve the insulation, but only slightly.
Roof space: only the best insulation should be fitted such as celotex or kingspan. Mineral wool,
fibreglass or polystyrene insulation are not particularly good insulators and we would not expect
them to be used in new or renovated buildings. Other products such as Thermafleece - a low
embodied energy insulation product - can be used in some areas.
Mind out for the myths! Contrary to popular belief, a new-build building that just complies with
current Part L in the UK building regulations would not really be very well insulated.
A definition of well insulated? It is generally believed that a well-insulated building would be
considered to have about 100 mm of good quality insulation such as Celotex or Kingspan in the walls
and floors, and about 200 mm in the roof. A very well insulated building could have as much as
double this thickness.
Insulation and heat pump technology. At East Green Energy, we’re reluctant to supply heat pumps
to buildings that are anything less than well insulated. The reason for this is simple. The better
insulated a building, the lower the flow temperature required into the underfloor heating system, so
the less the heat pump has to raise the temperature, the more efficiently the heat pump will
operate. In addition, the better insulated a building, the less energy it will need to heat it in the first
instance. We want people to be nothing less than delighted with the heat pump technology which
we install and with the consequent low-energy bills, so we make it a top level requirement that the
building has very good insulation in place.
Calculate your carbon footprint
Find out more about the CO2 emissions which accompany your daily lifestyle. It could be a revealing
benchmark to stimulate you yet further into taking on greener initiatives, or give a useful ‘before’
picture to compare with future footprint analysis once you have installed the renewable energy
systems of your choice.

 

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Wind Turbines

Benefits:

  • 28.0p/kWh income for own power used in the home
  • 29.7p/kWh income for own power exported to the national grid
  • Payable to you for 20 years
  • Tax-free
  • Plus savings by reduction in your purchase of electricity from the national grid

 

Paybacks of fewer than 5 - 10 years are now being achieved due to the feed in tariffs, whereby
‘excess’ electricity generated by your turbine can be supplied back to the national systems.

The feed-in tariff for a wind turbine of between 1.5 – 15 kw has been set at 28p/kWh. These rates
will be index-linked to inflation over the 20-year life of the scheme.

Homeowners will be exempt from income tax on revenue from the feed-in tariff, providing that the
energy generated is consumed mainly at the home property.

Scale
Tariff level (p/kWh)
Tariff lifetime (years)
Wind ≤1.5 kW 36.2 20
Wind >1.5 - 15 kW 28.0 20
     

Ofgem produce a useful information sheet about Feed-in Tariffs. Find out more > 

Print FIT info sheet >

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