Probably the most attractive aspect of a photovoltaic solar installation is the government funded grant scheme known as the feed in tariff (FIT). This provides the owner of a PV system a return on their initial investment, not just through savings on their electricity costs, but with a guaranteed 25 year index linked payment for every unit they generate whether they use it or not. Added to this any surplus electricity generated is sold back to the supply company to ensure not a single watt is wasted. Just imagine that you could be getting paid to make significant savings to your electricity bill, and you can really appreciate why this is one of the most attractive investments available today.
It all came about when The Department of Energy and Climate Change (DECC), used powers in the “Energy Act 2008”, and introduced the FIT scheme to create incentives for people to invest in small scale (less than 5MW) low carbon electricity generation. Starting on the 1st April 2010 this scheme has revolutionised the world of renewable energy generation, and taken it beyond the realms of traditional energy companies and into homes and businesses across the UK. FITs are intended to play a part in the UK achieving targets of 80% reduction in carbon emissions by 2050 and 15% of energy from renewable energy sources by 2020.
Already found across Europe, the solar PV market accompanied by this clean energy cashback scheme (the FIT), has lead to significant reductions in carbon emissions and contributed to an industry with more than 170,000 jobs.
So what does this mean in real terms I hear you asking? Well as an example in Birmingham typical irradiation levels result in 875 kWh over twelve months. This means a 2.5 kW PV system optimally oriented can deliver 190 kWh per annum, over 50% of the average household’s requirements. This translates in financial terms as:
1. FITs @ 41.3p per kWh = FIT payment £ 900.00
2. Export @ 50% 3p /kWh = Export payment £ 30.00
3. Customer saving @ 50% 11p/kWh = saving £ 120.00
Year one benefits = £1050.00
As these payments are completely tax free and index linked, this come to a 25 year return of £32,000. Added to this a typical domestic solar PV panel could prevent over 11 tonnes of CO2 emissions over its lifetime, helping to create a cleaner more sustainable method of electricity generation.
On top of this there are virtually no maintenance costs involved, therefore after the initial outlay you can just sit back and enjoy the rewards.
So just to recap on how the feed in tariff works. If you are eligible to receive the FIT then you will benefit in 3 ways:
1. Generation tariff – a set rate of 41.3p paid by your electricity supplier for each unit (or kWh) of electricity you generate. This rate will continue on the same tariff for 25 years in the case of solar electricity (PV).
2. Export tariff – you will receive a further 3p/kWh from your electricity supplier for each unit you export back to the electricity grid, that is when it isn’t used by you.
3. Make savings on your electricity bill – you will be making savings on your electricity bills because you will be consuming the electricity you produce so reducing the amount of electricity you buy from your provider. The amount you save will vary depending how much of the electricity you use. The more energy efficient you are the more you can export back to the grid. It makes sense!
So don’t hesitate and contact Cotswold Solar Power for your free no obligation survey to see how we can make the feed in tariff work for you too.
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