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Solar PV How the feed-in tariff works

Introduction to the Feed-in Tariffs

The feed-in tariffs, sometimes referred to as the ‘clean energy cash-back scheme’,  is a government scheme that is designed to reward individuals and businesses for investing in electricity producing renewable energy systems like solar panels and wind turbines. It has been in operation since April 2010 and has done a huge amount to develop the solar pv industry in the UK. The key benefits of the feed-in tariffs are:

  • They are index linked – they will rise every year with inflation (RPI)

  • It is guaranteed for 20 years

  • For domestic systems it is tax free

The rates that your will be eligible for vary depending on:

  • The size of the system

  • The technology you choose to install

  • When the system is installed

There are also some technology specific issues, for example, if you want solar panels installed you need your property to have an energy performance certificate of D or above if you want the higher tariff.

The feed-in tariff changes from time to time (normally every three months) depending on the number of installations that have taken place recently – however the thing to remember is that you are always tied in to the tariff you start at. Any changes to the feed-in tariff effect new systems not existing one.

Once you have a renewable energy system installed it will be generating electricity, some of which you will be using on site and some of which you will be exporting to the grid (your neighbours will be using it more than likely!). The Feed in Tariff pays you for all of the electricity you generate whether you use it on site or export it to the grid! You get an additional, smaller payment for the electricity you export to the grid called the export tariff. 

 

Unrelated to feed-in tariffs you will get the additional benefit of a lower electricity bill. Therefore the total financial benefit from your system will comprise of:

  1. The Generation Tariff

  2. The Export tariff

  3. Electricity savings made

These three figures are often lumped together into one ‘Annual financial benefit’ and used to calculate your return on investment and payback period.

 

The Structure of the Feed in Tariffs

FITs can be paid to individuals, households, communities and businesses when they generate electricity from eligible small scale low carbon energy sources. The FITs consist of two elements of payment, the ‘generation tariff’ and the ‘export tariff’. For practical purposes these are considered as one ‘Feed-in tariff’. The payments are made to generators (e.g. homeowners), and paid for by licensed electricity suppliers (e.g. Eon, British Gas etc), 

 

The “generation tariff”

This is a fixed price per kilowatt-hour (kWh), set at different levels for different technologies and installation sizes. The tariff levels lower for new projects over the years, but any individual installation will continue to receive the same generation tariff level throughout its entire support period under the FIT scheme. This is paid for every kWh of electricity generated. The tariff will increase annually with inflation. This is measured accurately by an Ofgem approved generation meter. Payments are made by the supplier based on the readings from the generation meter.

 

The “export tariff”

Generators are guaranteed an extra payment for any electricity generated that is not used on-site. It is worth noting here that the export tariff is not actually measured but is for most small-to-medium domestic scale installations assumed to be 50% of the total generated. In our experience this is a pretty accurate estimation. 

 

Generators also benefit because they can use the electricity they generate on-site to offset some or all of the electricity they would otherwise have had to buy. Tariffs are set through consideration of technology costs and electricity generation expectations at different scales, and are set to deliver an approximate rate of return of 5-8% for well sited installations although it is common for rates of return to be 10% or higher. Accordingly, the tariffs that are available for new installations “degress” each year. 

FITs income for domestic properties generating electricity mainly for their own use will not be taxable income for the purposes of income tax.

Feed-in Tariff Rates

The following table is not exhaustive and is correct of the 9/2/2013. The table demonstrates the tariffs in pence per kWh. Note: The feed-in tariffs are linked to the Retail Price Index.

Summary of the solar pv rates

 

Total installed

capacity (kW)

Generation tariff 

with eligibility date

1 Aug - 31 Oct 2012

Generation tariff 

with eligibility date

1 Nov - 30 April 2013

Lower tariff (if EPC

requirement not met)

with eligibility date 1 Aug

2012 - 30 April 2013

 

<4 kWp (new build and retrofit) 16.0 p/kWh 15.44 p/kWh 7.1 p/kWh
>4-10 kWp 14.5 p/kWh 13.99 p/kWh 7.1 p/kWh
>10-50 kWp  13.5 p/kWh 13.03 p/kWh 7.1 p/kWh
stand-alone 7.1 p/kWh 7.1 p/kWh 7.1 p/kWh

Source http://www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Feed-In-Tariffs-scheme-FITs Date: 9/2/2013

For a full table visit the ofgem website http://www.ofgem.gov.uk/Sustainability/Environment/fits/tariff-tables/Pages/index.aspx

 

For solar PV panels

  • The export tariff currently stands at 4.5p/kWh (9/2/2013)

  • Properties will need an EPC rating of D or above

  • The tariff period is 20 years

  • The tariff rates are reviewed every 3 months

Summary of wind, hydro and microchip rates

 

Summary of wind, hydro and microCHP rates
Technology Tariff band (kW capacity) Tariffs from 1st December 2012
Hydro <15 21.0 p/kWh
  >15 to <100 19.6 p/kWh
Wind <1.5 21.0 p/kWh
  >1.5 to <15 21.0 p/kWh
  >15 to <100 21.0 p/kWh
Mico-CHP <2 21.0 p/kWh

Source http://www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Feed-In-Tariffs-scheme-FITs Date: 9/2/2013

For a full table visit the ofgem website http://www.ofgem.gov.uk/Sustainability/Environment/fits/tariff-tables/Pages/index.aspx

 

For wind turbines, hydro and micro-CHP

  • The export tariff currently stands at 4.5p/kWh (9/2/2013)

  • An EPC rating of D is NOT required

If you have any questions about the tariffs please feel free to call Cambridge Solar on 01223 863 885.

 

How the feed-in tariff works

How the feed-in tariff works

 

EXAMPLE: A solar PV system that generates 2000 kWh in a year for a house that uses a total of 4,500 kWh per year

 

This example is worked through carefully below:

 

Generation tariff – This is earned for 100% of what is generated

15.4 pence x 2,000 kWh = £308 (1)

Export tariff – This is assumed to be 50% of what is generate

4.1 pence x 1,000 kWh  = £41 (2)

Electricity savings – What you don’t export you are using on site

13 pence x 1,000 kWh  = £130 (3)

So the total financial benefit would be (1) + (2) + (3)

Total annual benefit = £308 + £41 + £130 = £479

 

Detailed Explanation

In this illustrative example, the site generates (G) 2,000 kilowatt-hours (kWh) per annum (here with a retrofitted <4 kWp solar PV system) which is metered using the site’s generation meter. They are then assumed to have exported (E) 50% of their generation onto the local electricity network (either as metered exports or deemed exports). The other 50% of generation is used on-site (O). The household uses (U) a total of 4,500 kWh per annum, therefore, they need to import (I) 3,500 kWh from their electricity supplier.

Using this illustrative example, the generator will receive a FITs payment of £308 per annum (made up of a generation tariff payment of 2,000 kWh x 15.4 p/kWh = £308 plus an export tariff payment of 1,000 kWh x 3 p/kWh = £41). They also derive a benefit from the 1,000 kWh they generate and use on-site as that will offset 1,000 kWh they would otherwise have had to buy from their electricity supplier. Assuming an import price of 13 p/kWh this would be a saving of £130 (1,000 kWh x 13 p/kWh).

 

How things work in-practice

With your solar pv system you will have an ofgem approved ‘Generation Meter’ installed. This will measure the amount of kWh your solar panel or wind turbine system has generated. The number on the screen the cumulative total you have generated. You may find this is a slightly different figure to the number on your inverter but they will be very close. The generation meter is the correct or ‘official’ reading.

Every now and then (probably every quarter) your electricity supplier will ask for a reading. It is sometimes possible to submit readings online. Based on this reading you will get a payment giving you the generation tariff for 100% of the reading and the export tariff for 50% of the reading.

That’s it…you can then sit back and enjoy they free electricity and the regular payments!

Suppliers

Information obtained from ofgem website 9/2/2013.

Blog article worth reading on the feed-in tariff suppliers

Confirmed list of FIT licensees - 1 April 2012 to 31 March 2013

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British Gas

Encompassing the British Gas Trading Ltd Licence

Telephone: 0800 316 1477

Email: feedintariff@britishgas.co.uk

Website: www.britishgas.co.uk

 

Ecotricity

Encompassing The Renewable Energy Company Ltd Licence

Telephone: 08000 302 302

Email: microtricity@ecotricity.co.uk

Website: www.ecotricity.co.uk

 

EDF Energy

Encompassing the EDF Energy Customers Plc & SEEBOARD Energy Limited Licenses

Telephone: 0800 404 9087

Email: feedintariffs@edfenergy.com

Website: www.edfenergy.com

 

EnDCo

Encompassing the Energy Data Company Limited Licence

Telephone: 0124 525 4910

Email: karli.parmenter@endco.co.uk

Website: www.endco.co.uk

 

Energy 2 Sell

Encompassing the Energy 2 Sell Limited, I Supply Energy Limited & Supply Energy Limited Licenses

Telephone: 0120 229 8444

Email: barbara.gillings@gilmond.com

 

E.ON

Encompassing the E.ON Energy Limited & Economy Power Limited Licenses

Telephone: 0845 301 4884

Email: FeedInTariffEnquiries@eonenergy.com

Website: www.eonenergy.com

 

first:utility

Encompassing the First Utility Limited Licence

Telephone: 0845 215 5000

Email: feedintariffs@first-utility.com

Website: www.first-utility.com

 

GDF SUEZ Energy UK

Encompassing the GDF SUEZ Marketing Limited Licence

Telephone: 0113 306 2046

Email: export@gdfsuezuk.com

Website: www.gdfsuez-energy.co.uk

 

Good Energy

Encompassing the Good Energy Limited Licence

Telephone: 0845 456 1640

Email: enquiries@goodenergy.co.uk

Website: www.goodenergy.co.uk

 

Green Energy

Encompassing the Garsington Energy Limited Licence

Telephone: 0800 954 0675

Email: sharon@greenenergyuk.com

Website: www.greenenergyuk.com

 

iSupplyEnergy 

Encompassing the Energy Coop Licence

Telephone: 0120 261 2162

Email: FIT@iSupplyEnergy.co.uk

Website: www.isupplyenergy.co.uk

 

Lourdes Associates Limited

Encompassing the Lourdes Associates Limited Licence

Telephone: 0845 652 6309

Email: ferhad@lourdes-associates.co.uk

Website: www.lourdes-associates.co.uk

 

Midcounties Co-operative

Encompassing the Co-operative Energy Limited Licence

Telephone: 0800 954 0693

Email: fit@cooperativeenergy.coop

Website: www.midcounties.coop

 

Npower

Encompassing the Npower Limited, Npower Northern Limited, Npower Northern Supply Limited , Npower Direct Limited, Npower Yorkshire Limited & Npower Yorkshire Supply Limited Licenses

Telephone: 0845 078 2977

Email: microgeneration@npower.com

Website: www.npower.com

 

Opus Energy

Encompassing the Opus Energy Limited & Opus Energy (Corporate) Limited Licenses

Telephone: 08432272377

Email: corporaterenewables@opusenergy.com

Website: www.opusenergy.com

 

Reuben Power

Encompassing the Reuben Power Supply Limited Licence

Telephone: 0207 517 2040

Email: info@reubenpower.co.uk

Website: www.reubenpower.co.uk

 

Scottish Power

Encompassing the ScottishPower Energy Retail Limited Licence

Telephone: 0845 270 1414

Email: Microgen@scottishpower.com

Website: www.scottishpower.com

 

Smartest Energy

Encompassing the SmartestEnergy Limited Licence

Telephone: 0141 206 3732

Email: iain-robertson@smartestenergy.com

Website: www.smartestenergy.com

 

Spark Energy

Encompassing the Spark Energy Supply Limited Licence

Telephone: 017 5050 5294

Email: helen.hill@sparkenergy.co.uk

Website: www.sparkenergy.co.uk

 

SSE (encompassing Scottish Hydro, SWALEC, Southern Electric & Atlantic)

Encompassing the SSE Energy Supply Limited & South Wales Electricity Limited Licenses

Telephone: 084 5076 7634

Email: microgeneration@scottish-southern.co.uk

Websites: www.southern-electric.co.uk

www.hydro.co.uk

www.swalec.co.uk

www.atlanticeg.co.uk

   

Total Gas & Power

Encompassing the Total Gas & Power Limited Licence

Telephone: 017 3727 5844

Email: energy.services@totalgp.com

Website: www.totalgp.com

 

Tradelink

Encompassing the Tradelink Solutions Limited Licence

Telephone: 0192 371 3840

Email: info@tradelinksolutions.com

Website: www.tradelinksolutions.com

 

UPL

Encompassing the Utility Partnership Ltd Licence

Email: fitenquiries@up-ltd.co.uk

Website: www.up-ltd.co.uk

 

Utiligroup

Encompassing the Lumen Energy Supply Limited, Candela Energy Supply Limited, Magnetic Energy Supply Limited, Coulomb Energy Supply Limited & Circuit Energy Supply Limited Licenses.

Telephone: 01772 770410

Email: paddy.kay@utiliserve.co.uk

Website: www.lumen-energy.co.uk

www.candela-energy.co.uk

www.magnetic-energy.co.uk

www.coulomb-energy.co.uk

www.circuit-energy.co.uk

 

Utilita

Encompassing the Utilita Electricity Limited Licence

Telephone: 0196 289 1171

Email: fit@utilita.co.uk

Website: www.utilita.co.uk

 

Utility Warehouse

Encompassing the Electricity Plus Supply Limited Licence

Telephone: 0844 815 7777

Email: feedintariffs@utilitywarehouse.co.uk

Website: www.utilitywarehouse.co.uk 

 

 

Blog article worth reading on the feed-in tariff suppliers

 

 

Useful Links

 

Energy savings trust feed in tariff page

Gov.uk feed-in tariff page

Ofgem feed in tariff page 

Ofgem feed in tariff rates

Blog article worth reading on the feed-in tariff suppliers

 

 

How to Apply

For solar PV systems, firstly you will need to ensure you house has an energy performance certificate of a D or above or you will only be eligible for the lower tariff rate. This involves getting an EPC surveyor to assess your property. Cambridge Solar includes this in the price of their systems. 

After your solar panel or renewable energy system has been installed you will need to register it with your electricity supplier.

Under the ‘Suppliers’ link above is a list of the main suppliers and details of what you need to do to register for the Feed-in Tariff:

  1. Contact your electricity supplier for an application form or download it online

  2. Return your completed form back to your electricity supplier within 5 working days of your solar PV installation being completed – any later than this and your electricity supplier will not accept you initial generation meter reading.

We recommend that you begin to fill in your forms as soon as possible. Most suppliers will ask for:

  1. The completed feed in tariff form – from the supplier

  2. An energy performance declaration (sometimes part of the form, sometimes separate) – from the supplier

  3. An EPC certificate

  4. A MCS certificate for your installation (issued by Cambridge Solar on completion)

  5. A copy of your installation invoice/proof of purchase

  6. Sometimes they ask for some ID and/or proof of address

 

They don’t like to make things easy!

 

Get in touch with us if you have any questions or queries regarding the application process.

Go to our contact form.

To arrange a free site survey call today on: 01223 863 885