Solar PV Feed in Tariff From August 1 2012

Changes To Solar PV Feed in Tariff from the 1st August 2012

The UK Government announced on 24th May  the new tariff rates for solar PV which will come into effect on 1st August 2012.

Householders with an eligibility (application) date on or before 31st July 2012 will receive the current 21p/kWh (<4kW) rate. Those with an eligibility date after this should be aware of the key changes announced by the UK Government.

From 1st August 2012:

  • The new tariff rate for solar PV <4kWp will drop to 16p/kWh with an EPC band D or higher (if band E or less the lower tariff rate has also dropped to 7.1p/kWh).
  • The export tariff rate will increase to 4.5p/kWh for all new solar PV installations.
  • The tariff period (lifetime) will be reduced for solar PV from 25 to 20 years for all new solar PV installations.

How the scheme works

If you are eligible to receive the FIT then you will benefit in 3 ways:

  1. Generation tariff– a set rate paid by your energy supplier for each unit (or kWh) of electricity you generate.

Currently set at 21p p/KWh until 1 August 2012 and 16p p/KWh thereafter. This income is tax free and index linked to RPI, so will rise with the rate of inflation over the life of the tariff for a period of 25 years.

  1. Export tariff– you will currently receive a further 3.1p/kWh from your energy supplier for each unit you export back to the electricity grid that is when it isn’t used on site, (from 1 August 2012 this will increase to 4.5p/kWh).
  2. Energy bill savings– you will be making savings on your electricity bills , because generating electricity to power your appliances means you don’t have to buy as much electricity from your energy supplier. The amount you save will vary depending how much of the electricity you use on site.

Domestic FIT installations have their export estimated at 50%. This will remain until smart meters are rolled out across the UK.

Example of how the Feed-in Tariff work

As an example, a typical domestic solar electricity system, with an installation size of 3.92 kWp could earn around:

  • £695 per year from the Generation Tariff @ 21p p/KWh
  • £50 per year from the Export Tariff @ 3.1p for 50% KWh generated
  • £200 per year reduction in current electricity bills based on 12.5p average import price.

This gives a total saving of around £945 per year.

This assumes 50% of the electricity generated is exported. The figure will vary depending on how much is exported.

This means that there has never been a better time for you to install a Solar PV system. Not only will you be significantly reducing your carbon footprint, you’ll also be reducing your energy bills and getting paid to do it!

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