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. These Generation Tariff rates are shown as follows:

Size of Installation	Generation Tariff (pence per kWh of electric produced)	Tariff lifetime (years)
≤4 kW – retrofit	41.3	25
≤4 kW - new-builds	36.1	25
>4-10kW	36.1	25
>10 - 100kW	31.4	25
>100kW - 5MW	29.3	25
Standalone	29.3	25

 

The Generation Tariffs outlined above are index-linked to inflation to provide a secure means of financial return guaranteed over the next 25 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 3p 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 with a solar PV array producing 2500 kWh of electricity per year, the user would receive total benefits of approximately £1000 per annum guaranteed for the next 25 years. 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.