SOLAR INVESTMENT, TARIFFS AND CALCULATIONS
Solar PV calculator provided courtesy of Solar Guide to demonstrate how a typical solar PV installation can generate revenue that is not only guaranteed for 25years but is also is linked to the RPI (retail price index) so as inflation rises so do your payments.
What is the Feed-in Tariff?
On 15 July 2009. The Government announced a feed-in tariff for solar photovoltaic installations called the 'Clean Energy Cash Back Scheme'. The new tariff scheme will officially replace the Low Carbon buildings Program grant scheme in April 2010. *
Who is eligible?
All solar PV system installations, private and commercial, after 15/7/09 are eligible. The scheme launch date is 1/04/10. On the commercial side, the feed-in tariff will encourage solar photovoltaic (PV) installations among farmers, rural businesses, small and medium enterprises, where PV installations can be linked to other rural development program and enterprise grants. See our regional grants section for more information.
How much will I get?
The tariff set out in the consultation document are.
41.3p per unit for systems up to 4kWh (36.1p for new build).
36.1p for systems 4 - 10kWh.
31.4p for systems 10Kwh - 100kWh.
29.3p for systems 100kWh - 5MW.
Additional 3p bonus will be awarded for every unit of electricity exported.
How Long Will It Last?
The Government has committed to pay the tariff for 25 years.
Will The Tariff Change?
Once your tariff is agreed with the Government it will not decrease
and will be index linked and set for 25 years. The tariff is set
for 2 years at the high rate and for installations after this point,
the tariff will decrease. This is designed to induce early uptake.
Why Is The Government Doing This?
The Government is way behind other European countries on commitments
to reduce carbon emissions and to secure against future oil supplies. This
is one way it can catch up.
Feed-in tariffs have been introduced successfully in many countries
around the world, including Spain and Germany. It has encouraged
huge growth in solar PV and created many jobs.
CAPITAL GRANTS
Capital grants are available for the installation for renewable ebergy technology though the government national schemes and also regional grant programmes.
Farmers and rural businesses may be eligable for grant support through regional Rural Development Agencies.
Interest Free Loans
The Carbon trust offers interest free loans to SMEs in England and Scotland or any sized enterprise in Wales and Northern Ireland to install solar photovoltaic systems.
Find out more from the Carbon Trust.
Green Mortgages
Green Mortgages are being proposed by the government to help homeowners pay for the installation of technologies such as solar panels. In the proposal, the loans will be made available through high street banks , with repayments less than the savings made. If a house is sold the loan will be passed to the new owner.
Example Calculation
This is a feed-in Tariff example for a 1.8kWp installation before April 2012
Annual UK family household electricity bill (3,500kWh @0.14p) -£490
Estimated Cost of 1.8kWp system incl vat -£8000*
Electricity savings from system output (approx 1,750KWh) if used in house -£245
Income from feed-in tariff @41.3p - £722
Total Savings = £967
Approximate return on investment - 12%
Payback Time - 8 yrs (based on today's energy prices)
* subject to certain criteria
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FAQ's
What are Solar Photovoltaic (PV) Panels?
Solar photovoltaic panels convert sunlight directly into electricity that can be used to run appliances and lights. Photovoltaic cells generate energy even when it is overcast and cloudy as they absorb scattered light.
How are Solar PV Panels Fitted?
Solar photovoltaic panels can be mounted on a roof or ground mounted. Ideally the roof will be south facing, and near to or at an angle of 30 degrees with the horizontal for optimum performance. The solar panels produce DC electricity, so a small inverter will be fitted inside the house, to change the DC into AC (used in all normal homes and the Grid). Installation is clean, with minimal disruption and no extra space needed indoors.
What is a grid connected system?
Solar photovoltaic panels can be connected to the Grid through the local electricity supplier. Surplus electricity can be sold back to the supplier.
How much do they cost?
Solar PV system installation costs are around £4.500 per kW installed based on a 4 Kw system. The price will vary depending on the size of individual installations.
How long does the installation process take?
For an average system, the installation process rarely takes more than a few days, with minimal disruption. Scaffolding is required for work on the roof.
What is the feed-in Tariff?
The Government announced a feed in tariff on 15 July 2009 applicable for all installations from that date, but officially beginning in April 2010. For every unit a photovoltaic system up to 4kW produces, the Government will pay 41.3p. For systems up to 10kW the tariff is 36.1p.