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Grant

 

Feed In Tariff (FIT)

The Feed In Tariff (FIT), previously known as the Clean Energy Cashback scheme (CECs), replaces the grant assistance system as part of the Low Carbon Buildings Programme (LCBP). The new FIT scheme provides an incentive to reduce your carbon footprint, minimise your energy costs whilst at the same time receiving useful income for homeowners, “non-for-profit” organisations or businesses. The government-backed initiative rewards the building owner for installing solar photovoltaic (PV) systems with several attractive tariff/ relief rates. Every solar PV system is eligible for the following tariffs and relief as given below:

  • Generation Tariff
  • Export Tariff
  • Reduction in cost of importing electricity

Further information on each of these financial rewards is explained below.

The Generation Tariff

For every approved solar PV system installed and commissioned by Radical Energy, each will qualify for the Generation Tariff for every kilowatt hour (kWh) of electricity produced. Whether the building consumes all the electricity it generates or not the Generation Tariff is still applicable. The Generation Tariff rates eligible from 1 July 2013 to 31 August 2013 are shown as follows:

Size of Installation

Generation Tariff (pence per kWh of electric produced)

Lower Tariff (if EPC requirements not met) Tariff lifetime (years)
≤4kW – retrofit and new build 14.9 6.85 20
>4-10kW 13.5 6.85 20
>10 - 100kW 12.57 6.85 20
Standalone 6.85 6.85 20

 

  • Evidence of the property's EPC rating will be required when applying for FITs.  If no evidence showing the EPC has a band D or higher then the lower rate will apply.
  • The tariffs are to be reviewed every three months and may be revised, so please check the Energy Saving Trust website for up to date information.   

The Generation Tariffs outlined above are index-linked to inflation to provide a secure means of financial return guaranteed over the next 20 years. The additional benefit for domestic installations is that all annual payments received from the scheme are free from income tax. In addition to the Generation Tariff solar PV installations will be applicable for an Export Tariff as mentioned below.

The Export Tariff

If any electricity generated by the “grid-tied” solar PV array is not used by the building it can be exported onto the National Grid, making use of the Export Tariff which is currently set at 4.64p per kWh or may be sold on the open market at an improved rate.  

Reduced Imported Electricity

As well as both the Generation and Export Tariffs for every kWh of electricity produced by the solar PV array and consumed by the building, the cost of importing the electricity (typically 15p per kWh) from your energy supplier is offset.

FIT – Worked Example

For a typical domestic user (who's property meets the EPC requirements) with a solar PV array producing 3300kWh* of electricity per year and exports 50% of electricity generated, the user would receive total benefits of approximately £815 per annum guaranteed for the next 20 years.  

Calculated as follows:

Generation Tariff:  3300kWh x 14.9p/100 = £491.70

Export Tariff:  3300kWh x 4.64p/100 x 50% = £76.56

Reduction in cost of imported electricity: 3300kWh x 15p/100 x 50% = £247.50

Total = £815.76

After this period the solar PV system would still generate a similar amount of electricity and with a typical system lifetime of 50 years would remain eligible for the Export Tariff offered and a reduction in imported electricity.  

*Please note that this example is for illustration of how the FIT payments are calulated only.  PV performance cannot be guaranteed as it is based on a number of factors including location of the panels, shading and orientation.