feed-in-tariffs, cash back & solar grants.

Why the cash incentives ?

The UK government is committed to legally binding Co² reduction targets. Specifically, it must achieve a Co² emissions reduction of 26% by 2020 ( from the 1990 level ) , and an 80% reduction in all greenhouse gas emissions by 2050.
Most of the other EU states have already implemented feed-in-tariff schemes which leaves the UK behind the rest of Europe on achieving its obligations, but it does give us a view of how the incentive mechanism works in the real world, and how best to maximise the benefits.

What will the incentives do for me?

Photovoltaic solar power

From April 2010, the government will pay anyone who is generating renewable energy 41.3p per kWh for units they use themselves , and 44.3p for units sold back to the grid.*¹
Just take a moment to comprehend that. You get paid whether you use the energy yourself, or not.
The payments are linked to inflation and represent tax free income.

But the tariff incentive paid by the government will decrease year on year for installations after March 2012 so act now!


example
A household in London with a south facing roof installs a 3kW system.

Annual payment for generation of approximately 2550kwH per year (2550 x 41.3p)*²
£1053.15
Annual saving on electricity bill from self generation*³
£357
Total annual financial benefit
£1410.75

Total return from the guaranteed 25 year contract
£35268.75

Solar thermal water heating

The government issued its consultation paper for the renewable heat incentive on 1st Feb 2010 which will be open until 26th April 2010.
In the paper, the government propose to pay a tariff of 18p per kWh over a guaranteed 20 year period. Although this renewable heat incentive will not apply until April 2011, from the paper "installations completed after 15 July 2009 would be eligible for RHI support from April 2011 as if they had been installed then".In our opinion, given the shortage of MCS installers in the UK and the predicted increase in demand from April 2011 onwards, we recommend that to avoid a likely price increase driven by the demand/supply imbalance, you should look to install before April 2011.

example
Although it is difficult to be precise on the RHI payments , which are dictated by a 'deemed' power output for each individual property and consider such things as the panel efficiency, roof position etc, we can approximate for a typical 3 bed family house installation

Annual payment for deemed generation of approximately 2000kWh per year (2000kWh 18p)*²
£360
Annual saving on water heating bill from self generation*³
£400
Total annual financial benefit
£760

Total benefit over the guaranteed 20 year contract
£15200


What are the other financial implications?

  • Increased property value
    As indicated from an Energy Saving Trust survey of 2700 people in 2009, a property which generates it's own power and receives cash from the government will command a higher value in the marketplace.
  • Transferable income rights
    If you move home in the future, you can make provision to retain the rights to the income as part of the transfer of home ownership.
  • Finance
    There are a variety of finance options available to cover the cost of the installations. Contact us for more details or to be kept up to date with the latest developments in the government proposed 'green bank' and 'green loans' schemes.


Why do I need to act now?

The Government does not necessarily want to give away cash , it simply has to in order to drive the solar power installation volume to meet it's emissions targets. When the volume of solar panel installations reaches the desired levels, we can expect the incentives to be reduced for all further installations, as has been the case in Spain and Germany.
The solar incentive scheme is purely and simply an economic mechanism to manage demand, best summed up by a quote from Julia Blunden in the New York Times.
"The most important lesson, which everyone has learned, is that if you are going to establish a feed-in tariff, you need to figure out how to make it market responsive".
In other words, the current government backed 20-25 year guaranteed cash incentives will only be available for a limited period.


How do I claim ?

By law, it's the responsibility of the property owner to apply for the government incentives. As part of our free service, we will recommend the technology, inform you of the available incentives and guide you through the process of application.
Contact us for a free survey, recommendation and quote, it couldn't be made any more simple!

*¹ maximum capacity 5MW
*² Assumes no additional income from selling back to the grid.
*³ Assumes no energy price rises. As prices rise , savings will increase. A very conservative assumption given that a 2009 OFGEM report predicts that energy prices will rise by 60% within the next few years.








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