Wednesday, 16 May 2012

How does the Feed in Tariff (FITs) work?

The UK Feed in Tariff was modelled on one introduced in Germany and implemented in the UK from 2010. It pays households that have invested in solar PV power systems a set rate for every kilowatt hour of electricity that they generate as well as a payment for all electricity that they export to the national grid. The export payment is current calculated as "deemed" until smart meters are widely used across the UK. The deemed rate is assumed to be 50% of the electricity generated so if you can use a larger proportion at home then you will still be paid for it. As the export rate is much lower than the FiT rate this won't be a massive saving.
Feed in tariff details in the UK for your solar panels

Depending on your viewpoint the Feed in tariff has either been a huge success leading to large numbers of solar installations to help our CO2 reduction targets and massively cutting the price of solar power or an expensive scheme that has been abused by large players to make money at the expense of all consumers who effectively pay for FITs through a levy on electricity bills.

What is not in dispute is the drop in the costs of installation since 2010. It was common for a 4kWp solar pv system to cost up to £20,000 at the time and as of May 2012 this can cost as little as £7000 now. Putting the cuts in the feed in tariff in context these current prices still give a better return than the original rate with the higher prices.
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3 comments:

  1. newboy30 June 2012 at 05:05

    people still dondt get the benifit of spending on solar panels??? leave money in the bank get 3% return..get solar panels get a 8% to 11% return..

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    1. J Drew30 June 2012 at 05:12

      Absolutely. At current generation levels I'm expecting our 3kWp panels to generate 3000kWh of electricity this year. Current FIT rates give that as £1416 income this year alone without even taking into account any saving on electricity used by us.

      Without any inflation that would be a total of £35,000 income over the 25 year term.

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  2. newboy30 June 2012 at 05:59

    having spoken to people about it, they checked it out 12 to 18 months ago and were put off by the £15000 + installation cost.Also bad publicity about the free installations..The older generation want to keep their money in their accounts.. live of the interest..they worry if they spend there money on solar panels and die after 4 or 5 years its not a good investment,and they will lose there money..I had to point out its better to get a higher return on solar panels,and enjoy the extra money,because if the do die they don't get to take the money with them

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