Feed In Tariff

The Government has published its plans to reward businesses, communities and home-owners who install solar electricity.

The Feed-in Tariff for small scale low carbon electricity has been finalised for introduction on 1 April 2010. The tariff levels are calculated to offer between 5-8% return on initial investment.

The structure of the tariff is:

• Payment is made for every unit of electricity generated, whether used or not. This is called the generation tariff and the exact amount paid varies according to the size of the system (see table below). The generation tariff is index linked. Businesses will pay tax on this revenue.
• If the electricity generated is consumed, then savings are made against grid electricity. Businesses therefore save money in line with the size and yield of the system. Most people believe that electricity will only become more expensive in the future, so the amount saved grows each year.
• If all of the electricity generated isn’t used, then a further tariff is available for the electricity exported back into the grid; the export tariff. This is the same for all generators and is set at 3p for a base price and is index linked.
• Tariffs will be paid for 25 years for photovoltaic generators, and for 20 years for anaerobic digestion, hydro and wind generators; projects within the micro CHP pilot will be paid for 10 years.

The inclusion of micro CHP in the Feed-in Tariff is available as part of a pilot scheme for up to 30,000 micro CHP installations initially. A review will take place when 16,000 units have been installed.

Interested in Photovoltaics? Click here to see the range available from Wolseley.