The UK’s Solar Energy Tariffs: A Beginner’s Guide

by Solar Selections on October 3, 2011

Generous Incentives for Installing Solar Panels on Residential Properties are Present in the UK

There are entire websites and journals set up to explain how the United Kingdom’s Solar Energy Feed-In Tariff operates. This article is written by way of introduction to the scheme, aimed at helping newcomers to the Solar Industry understand what is on offer, who can claim it and how long it’s available for. 

The Major Incentive for Installing Solar in the UK

The UK’s Solar Feed-In Tariff (FiT) is designed to reward property owners for installing solar energy systems and connecting them to the grid. Much like your energy provider currently charges you a rate for the energy you use, this Tariff is designed to reward you for energy you generate. The similarities between buying energy from the grid via your energy contract and selling them via your Tariff contract do not end there either, and really the scheme is designed to be a major champion against the ever rising energy costs.

The Feed-In Tariff Rates

You are financially better off via three different outcomes for installing a solar energy system.

  1. Generation Tariff - You are paid for just generating the clean energy. This is the most generous rate, and makes up the majority of a typical systems payback. The Generation Tariff differs for different sized systems and is also indexed to increasing energy costs. The rates are broken down here.
  2. Savings – When you generate a unit of energy on your property, it’s first priority will be to address demand on site. By this method, you’ve just saved yourself from buying that unit from your energy provider. As such, the amount you earn is purely dependent on the rate you would have paid taking the unit from your provider and is therefore indexed to energy increases. Check your energy charges to see what your paying per Kilowatt Hour (kWh) and you’ll get an idea of your potential savings.
  3. Export Tariff – When your system generates more than the property is using, the units of energy from your solar system automatically send themselves out onto the grid to power your neighbour’s or the school down the street. Distribution is random, but your energy provider will record this amount and pay you a rate indexed to inflation. The rate is set at 3.1pence per kWh (unit of energy)
The vast majority of the systems earnings come from the Generation Tariff, which as explained doesn’t discriminate over whether you are producing surplus energy or not. The differences between exporting all of your energy or using it all up will trickle down to a few hundred pounds a year, so is not the important factor. To get an accurate breakdown of your own use and potential generation, contact your Solar Selections Broker here.

Changes to the Tariff

The Government is closely monitoring the uptake of solar energy across the country. Sensibly, they do not want to over-extend the generosity of the scheme and have to withdraw the rates suddenly. At this point, the UK Government has stated that they are reviewing the tariff towards the end of 2011. Any proposed changes are to be brought in based on the findings with a fallback date of April 2012. If changes are needed drastically, such as in the case that the scheme is found to be too generous and costly, they may be brought in overnight. That is why it’s important to stay abreast of developments via our website, or even better by being in contact with a Solar Selections Broker.
Written by Jarrah Harburn
T: : 020 7205 2267
© 2011 Solar Selections Pty Ltd

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