Solar Energy Feed-in-Tariff (FiT) for UK Households
At long last the clouds have parted and the UK has followed its European neighbours to announce a solar feed-in-tariff. The Clean Energy Cash back Scheme announced in February was launched on April 1 and will run for 25 years. Householders will now be paid a rate of 41.3pkWh for electricity they generate.
According to Government figures this would result in up to GBP900 per year in tax free income, and a GBP150 saving on electricity bills for a 2.5kW solar installation. Whilst this seems like a generous incentive, for many households the up-front cost of GBP10,000-12,000 will make the systems unaffordable. British Gas, in partnership with the Clean Energy Council will launch a ˜Pay as you Save’ option to 500 households to help to ease the pain. The initiative will enable customers to pay back installation costs through savings on their monthly bill. The Department of Energy and Climate Change (DECC) have also launched a loans scheme to provide an added incentive to all types of households. Their aim is to get 7 million owner-occupied and rented households in the UK hooked up with solar by 2020.
The key points are:
- All accredited installs from July 2009 onwards will be eligible
- Subsidised tariff is for all generated electricity, whether consumed or exported.
- Tariff for <4kW retro-fit PV installs is 41.3p/unit (in year one)
- Tariff for <4kW new build PV installs is 36.1p/unit (in year one) Tariff for >4-10kW PV installs is 36.1p/unit
- Tariff for >10-100kW PV installs is 31.4p/unit
- Tariff for >100kW-5MW PV installs is 29.3p/unit
- Tariff for off-grid PV installs is 29.3p/unit
- Guaranteed 25 year tariff lifetime with annual raises indexed to inflation
- Tariff fixed for first two years (The tariff for an install will be fixed for 25 years based on the year it’s installed).
Though Britain is not known for abundant sunshine, the solar market is growing quickly. According to recent research by IMS new solar installations will reach 250MW in 2011 compared with just 25MW in 2009. If the various schemes and incentives are successful, the market may grow to 850MW per year by 2016. Considering current high energy prices and the environmentally friendly outlook of many UK households, rapid future growth is very likely. A recent survey by YouGov revealed that 71% of UK households would consider installing green energy systems if the feed-in tariff was generous enough.
Environmental Benefits
Andy Atkins, executive director of Friends of the Earth commented: œthe Clean Energy Cashback scheme will allow householders to earn tax free cash by turning their homes into mini green power stations, cut fuel bills and play their part in tackling climate change.
The FiT scheme is also encouraging housing associations, public buildings and private businesses to save money and be greener. The London Fire Emergency Planning Service and the Metropolitan Police along with other public and private organisations have already committed their buildings to a solar powered future.
The UK solar revolution is set to drive growth in green jobs and promote additional cost savings throughout the supply chain for renewable energy technology. Future schemes that are currently in consultation also include providing incentives for solar thermal hot water which will come into force in April 2011. It seems that though the UK has taken their time to join their more progressive counterparts in the rest of Europe, the solar landscape is beginning to change for the better.
Very sensible I hear you say!
Seb Kilborn
Solar Energy Consultant
Solar Choice
© 2010 Solar Choice Pty Ltd
Solar Choice and Seb,
I really liked your blog. Its good to hear that the UK has finally got its act together and established a Feed-in-tariff. Just wanted to see if you could post some information on the feed in amounts you get from other technologies. I believe the UK feed-in tariff encompasses: Hydro, anerobic digestion, wind, solar, etc… keen to know about it!
Hi Oli,
It is certainly good that the UK is starting to provide incentives to householders for electricity generation from renewable sources. The current feed-in-tariff scheme that started on April 1st encompasses small scale solar, wind and hydro installations up to 5MW in size. The FiT rate is the same for all these types of installation, however there has been some criticism of the government’s treatment of small scale wind generation recently (see http://www.guardian.co.uk/environment/2010/mar/10/feed-in-tariffs-turbine-solar). This essentially means that wind power is disadvantaged due to the requirement for small turbines to be certified by the government at considerable cost.
Small scale heat generation installations will be included in a seperate renewable heating scheme to commence in April 2011. Details re: FiT or rebate rates have yet to be finalised. This scheme will encompass the use of biogas, waste to energy technologies, ground based heat pumps and solar thermal to provide financial incentives for householders and business.
Let me know if you’d like any further details. Many thanks for getting in touch.
Seb