Monday, March 22, 2010

UK Feed in Tariff

Wilmslow, Cheshire
The new UK feed in tariff is about to start in the UK. With a higher than expected rate of 41.3p per kW a typical 2.5kW system can earn an income of around £1,200 per annum. read on to find out which system to install.......
The UK has lagged behind the rest of the world when it comes to the installation of solar panels. Although the scheme has come late, the actual rate set has been higher than what most people expected. So how exactly does the feed in tariff work?

Well the feed in tariff will consist of two elements:
Unit rate: 41.3p
Export rate: 5p

The unit rate of 41.3p will be paid regardless of whether the electricity is used by the homeowner or whether it is exported to the national grid. The export tariff is paid in addition to the unit rate. so lets take an example of a 1.0kW system with 50% used by the homeowner for their own use and 50% exported to the national grid.

500 kw @ 41.3p
500 kw @ 5p
Total earnings: £206.50 + £15.00 = £221.50

This payment will be made every year for the next 25 years. So bearing in mind that a typical solar pv system will last around 35 years, you would be looking at a payment of £7.752.00. For a typical install, you would be looking at a rate of return of 10%, and this is tax free.

The introduction of the feed in tariff should lead to an increase in the number of homes installing solar panels in the UK. next year will also see the introduction of the feed in tariff for solar thermal. whilst we do not yet know the details of the solar thermal tariff, the expectation is that we should see a return of around 10% for this. Wayne Morris of the big green company says "The UK solar industry has been waiting for some time now for the government to introduce the feed in tariff. The prediction is that solar panels could lead to a significant increase in the number of green jobs in the UK".

Incidentally the introduction of feed in tariffs in the US has led to a significant number of homes now installing solar energy. What is vital now is that the energy companies set up education campaigns to inform the UK about the benefits of solar energy.

1 comment:

  1. Having spoken to several of the energy suppliers in the UK, the export tariff is likely to be 3p per kWh exported. This is the minimum allowed under the Clean Energy Cashback Scheme.

    A 1kW system does not generate 500kWh per year in the UK. It would generate about 1100kWh and the average house would use almost all of that.

    The yearly value to a home owner would be about £590 per year and would pay the initial outlay back in about 12 years.

    Please feel free to use our Site Planner on line application at to check out some other scenarios.

    Nik Cross - RenSMART Ltd.