Funding & Grants
Feed in tariffs
The Governments Feed-in Tariff (FiT) are aimed at encouraging people to switch to renwable technologies, helping the UK to reduce it's carbon footprint and meet 2020 emissions targets.
The scheme will pay for every unit of electricity generated with MCS approved renewable technologies like solar PV, whether it is used in the home or exported back to the grid.
The scheme is guaranteed for 25 years resulting in a shorter payback, making solar PV systems an extremely attractive option both environmentally and financially.
Once the capital cost of the system is paid for, everything else generated and received as pay-back is tax free income.
Payment table
| Description | Feed in Tariff payments for Installations registered: 01 April 2011 - 31 March 2012 |
|---|---|
| Solar Photovoltaic with total installed capacity of 4kW or less, where installed on a new building before first occupation | 37.8 pence per kilowatt hour |
| Solar Photovoltaic with total installed capacity of 4kW or less, where installed on a building which is already occupied | 43.3 pence per kilowatt hour |
| Solar Photovoltaic with total installed capacity greater than 4kW but not exceeding 10kW | 37.8 pence per kilowatt hour |
| Solar Photovoltaic with total installed capacity greater than 10kW but not exceeding 100kW | 32.9 pence per kilowatt hour |
Calculation of pay-back example
A typical three-bedroom detached house*
| Average electricity cost per year | 3300kWh x 13p per kWh = £429.00 |
| Average cost of purchasing and installing an on-roof 1.8kW | Grant Solar PV System (10 modules) = £8100.00 |
| Approximate power generated per year by the Grant Solar PV system | 1693kWh |
| Annual income from the Grant Solar PV System | 1693kWh 56.3p = £953.16 |
| Approximate power generated over 25 years by the Grant Solar PV System | 42325kWh x 56.3p = £23828.76 |
| Typical payback time of Grant Solar PV System | £8100 / £953.16 = 8.5 years |
| Return on investment (ROI) over 25 year | Assuming no inflation = £15728.76 |
* Example is an approximate estimation only. Currently the average UK installed price for Solar PV is around £4500.00 per kWp. VAT @ 5% has not been included in this calculation. The Government has published that the FiT is non-taxable and will also be Index linked. Estimated electricity usage has been sourced from the Energy Savings Trust.
Renewable Heat Incentive (RHI)
The Renewable Heat Incentive Scheme (RHI) which is also referred to as 'Clean Energy Cash Back' is due to be introduced in two phases for domestic installations starting July 2011 subject to final confirmation by the coalition government. It will initially guarantee fixed payments for renewable instillations, followed by long term payments from October 2012.
Phase 1 (available from July 2011) - RENEWABLE HEAT INCENTIVE (RHI) Premium Payment.
This is called the "RHI Premium Payment" and will be worth around £15m and available to 25,000 householders in Great Britain who install from July 2011.
RHI is designed to provide financial support that encourages individuals, communities and businesses to switch from using fossil fuel for heating, to renewables such as wood fuel.
Current payments are
- Solar Thermal - £300/unit
- Air to Water Source Heat Pumps - £850/unit
- Biomass boilers - £950/unit
- Ground Source Heat Pumps - £1,250/unit.
Recipients of this payment will need to ensure that:
- They have a well-insulated home based on its energy performance certificate;
- They agree to give feedback on how the equipment performs.
- Technologies must be installed by and MCS certified installer.
Further guidance will be available shortly once announced.
Phase 2 (available from October 2012) - RENEWABLE HEAT INCENTIVE
People in receipt of the Renewable Heat Premium Payments will be able to receive long term RHI tariff support once these tariffs are introduced, as will anybody who has installed an eligible technology since 15th July 2009.
These tariff payments will start alongside the Green Deal from October 2012 to allow a more whole-house approach to heat production and energy saving.
Non - Domestic Sector
The Renewable Heat Incentive tariff for non domestic installations in the industrial, business and public sector will apply form July 2011. Payments will be made quarterly for a 20 year period. The RHI will be administered by Ofgem.