Feed In Tariffs (FITs)
Feed-in Tariffs (FITs) became available in Great Britain on 1st April 2010.
Under this scheme energy suppliers have to (compulsory for big six suppliers) make regular payments to householders and communities who generate their own electricity from renewable or low carbon sources such as Photovoltaic Panels PV.
About the Scheme
The scheme guarantees a minimum payment for all electricity generated by the system, as well as a separate payment for the electricity exported to grid. These payments are in addition to the bill savings made by using the electricity generated on-site.
Once you have a microgeneration technology installed you should experience a monthly reduction in your electricity bill and then receive an income from your Feed-in tariff provider. However, if you have taken out a loan to pay for the installation you will have to make monthly repayments to your loan company.
Feed-in tariffs are designed so that the average monthly income from your installation will be significantly greater than your monthly loan repayment (with a 25 year loan).
Scheme Benefits
If you are eligible to receive the FIT then you will benefit in 3 ways:
- Generation tariff – a set rate paid by the energy supplier for each unit (or kWh) of electricity you generate. This rate will change each year for new entrants to the scheme (except for the first 2 years), but once you join you will continue on the same tariff for 20 years, or 25 years in the case of solar electricity (PV).
- Export tariff - you will receive a further 3p/kWh from your energy supplier for each unit you export back to the electricity grid, that is when it isn’t used on site. The export rate is the same for all technologies.
- Energy bill savings – you will be making savings on your electricity bills , because generating electricity to power your appliances means you don’t have to buy as much electricity from your energy supplier. The amount you save will vary depending how much of the electricity you use on site.
The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS* scheme. See below for further details.
You will qualify for the full FIT payments if:
- The technology was installed between 15th July 2009 and 31st March 2010 and you transfered to FITs before 1st April; OR
- It is installed after 1st April 2010 using an MCS* certificated product and installer;
* The Microgeneration Certification Scheme (MCS) is an independent scheme that certificates microgeneration products under 50kW and installers in accordance with consistent standards
How does the Scheme Work?
As an example, a typical domestic solar electricity system, with an installation size of 2.2kWp could earn around:
- £770 per year from the Generation Tariff
- £30 per year from the Export Tariff
- £120 per year reduction in current electricity bills.
This gives a total saving of around £920 per year.
This assumes 50% of the electricity generated is exported. The figure will vary depending on how much is exported. Here is a diagram of how it works -
What payments will you be eligible for, and how can you claim them?
The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS scheme:
The following advice applies to domestic installations. If you have installed a qualifying electricity-generating system in a non-domestic property with a grant from the Low Carbon Buildings Programme, see the Low Carbon Buildings Programme website for further guidance.
Installed after 1st April 2010. MCS certificated product and installer
- You are eligible for full generation tariff and export tariff.
- Contact your energy supplier, and send them your MCS certificate to tell them you are eligible to receive FITs.
- If you install after the 2nd year of the scheme your tariff could be reduced, depending on the installation size.
At Northern Solar we will help you with your application so making the request for funding as easy as possible - contact us on 0151 523 1133.
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