Feed-in Tariff scheme

The new criteria from the Government  came into force from the August 1st , but what exactly is this new criteria and how will it affect potential buyers and impact their earnings or savings from solar?

Under the new criteria, in order to benefit from the maximum feed-in-tariff available for domestic installations, which currently stands at 16p/kWh for any system up to a '4kW system', all homeowners will need to produce an Energy Performance Certificate (EPC) with a rating of D or above. This is something that the Government believes will rule out 50% of homes in their current state.

The good news is that you can use an existing EPC for your home, provided that it is less than 10 years old. You should have a valid EPC certificate  if you've recently purchased your house, rented your property out, or even put your house on the market and decided not to sell, then you should have an active EPC already. If you don’t have a current EPC, Eurosolar will help you to get it if you order your Solar Panels from us..

We are not sure whether the Government's initial estimation of 50% of properties not being suitable is quite accurate. Some industry insiders estimate that 8 out of 10 properties will achieve a D rating either straight away, or after minor improvements such as loft or cavity wall insulation. Eurosolar has its own scheme set up and  offers that include these EPC-boosting extras,  for a small extra charge.

If you do require some improvements in order to raise your home's EPC its worth definitely worth doing so  the relative small cost and long term benefit. For those that may simply require loft and/or cavity wall insulation, which costs a few hundred pounds, the benefit and earnings from having solar panels installed that can generate up to £988 per year for 20 years upto 20.73 % per year (8.19% AER), is clearly worth that small additional cost. Having EPC “D” rating means that your solar energy that you generate from your solar panels will be much more valuable and 'go further' if your property retains more energy through its walls, roof or windows.

So although the new criteria may seem quite restrictive at first glance, the reality is that many properties will not only be sufficiently energy efficient, but they will already have an EPC that they can use. The remaining properties, many of whom will require only small amendments to achieve a D rating, will be forced to benefit even more from their solar panel installations by improving their energy efficiency.

 Solar PV changes

For solar PV installations with an eligibility date on or after 1 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). Full tariff table below.
  • 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.
  • The tariffs are to be reviewed every three months and will be revised according to deployment rates
    •  

    Summary of solar PV tariffs for systems with an eligibility date on or after 1st August 2012

    Band (kW) Standard generation tariff (p/kWh) Multi-installation tariff (p/kWh) Lower tariff (if energy efficiency requirement not met) (p/kWh)
    <4kW (new build and retrofit) 16.0 14.4 7.1
    >4-10kW 14.5 13.05 7.1
    >10-50kW 13.5 12.15 7.1
    stand-alone 7.1 n/a n/a

     

     Other technology changes (wind, hydro and microCHP)

    For wind, hydro and microCHP installations with an eligibility date on or after 1 December 2012:

    • The UK Government has confirmed there will be NO EPC requirement for non-solar PV technologies
    • No newly installed technology will receive more than 21p/kWh. See full tariff table below.
    • The export tariff rate for new installations will go up to 4.5p/kWh
    • Hydro –

    i) Microhydro (<50kW) accreditation has to go through the ROO-FIT process not MCS

    ii) The definition of “hydro generating station” has been extended to include small tidal projects

    • A degression mechanism for wind and hydro technologies (microCHP not included) will become effective from 1 April 2014 (baseline 5% though will depend on previous deployment rates)
     

    Summary of hydro, wind and microCHP tariffs for systems with an eligibility date on or after 1st December 2012

    Technology Tariff band (kW capacity) Current tariffs (no change to current policy) Proposed tariffs from 1 December 2012
    Hydro <15 21.9p/kWh 21.0p/kWh
    >15 to <100 19.6 19.6
    Wind <1.5 35.8 21.0
    >1.5 to <15 28 21.0
    >15 to <100 25.4 21.0
    Micro-CHP <2 kW 11.0 12.5

    Under the proposals, the new tariffs would apply to all new solar PV installations with an eligibility date on or after 12 December 2011. Such installations would receive the current tariff before moving to the lower tariffs on 1 April 2012. Consumers who already receive a FIT will see their existing payments unchanged, and those with an eligibility date on or before 11 December 2011 will receive the current rate.* Note that these are the current tariffs which we are not proposing changing and which, like all other current tariffs, will be adjusted in line with the Retail Price Index from 1 April 2012.

     General changes

    The UK Government are also making the following changes:

    • All multi-installation projects including social housing will be able to get a generation tariff equal to 90% of the standard tariff
    • A definition for community energy projects with a system of tariff guarantees and an exemption from meeting the energy efficiency requirements of EPC Level D or above for solar PV community and school installations
    • Amending the definition of “site” to prevent abuse of the scheme and to ensure that installations that necessarily share network connections, e.g. park homes and remote hydro installations, can access FITs on an individual basis
  • For more information, please visit the DECC website
    •  

    DECC has produced a guide for consumers.[filetype:pdf filesize: 27.03Kb] Renewable Energy Assurance Limited (REAL) has written to installers explaining how the changes will affect them.

    Consumers and industry representatives should also view the ‘Where do I find out more’ section to find out who to contact for further information.

    If you are considering generating your own electricity, the Energy Saving Trust[External link]website also offers information about your options. Energy Savings Trust helpline: 0800 512 012.

     

    Feed-in Tariffs (FITs) became available in Great Britain on 1st April 2010. And isn’t available in Northern Ireland - although this is under review.

    Under this scheme energy suppliers have to (compulsory for big six suppliers) make regular payments to householders and communities who generate their own electricity from renewable or low carbon sources such as solar electricity panels(PV) or wind turbines.


    The FITs scheme guarantees a minimum payment for all electricity generated by the system, as well as a separate payment for the electricity exported to grid. These payments are in addition to the bill savings made by using the electricity generated on-site.About the Scheme

    Once you have a microgeneration technology installed you should experience a monthly reduction in your electricity bill and then receive an income from your Feed-in tariff provider. However, if you have taken out a loan to pay for the installation you will have to make monthly repayments to your loan company.

    Feed-in tariffs are designed so that the average monthly income from your installation will be significantly greater than your monthly loan repayment (with a 25 year loan).

    Use the cashback calculator to see how purchase price and loan can impact on payback times.

    The scheme covers the following electricity-generating technologies, up to an installation size of 5 Mega Watts:

    • Solar electricity (PV) (roof mounted or stand alone)
    • Wind turbine (building mounted or free standing)
    • Hydroelectricity
    • Anaerobic digestion
    • Micro combined heat and power (micro CHP) (limited to a pilot at this stage)

    The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS* scheme. See below for further details

    You will qualify for the full FIT payments if:

    • The technology was installed between 15th July 2009 and 31st March 2010 and you transfered to FITs before 1st April; OR
    • It is installed after 1st April 2010 using an MCS* certificated product and installer;

    * The Microgeneration Certification Scheme (MCS) is an independent scheme that certificates microgeneration products under 50kW and installers in accordance with consistent standards. Any commercial or larger scale systems, over 50kW, and all anaerobic digestion installations must apply directly through the Renewables Obligation Order feed-in tariff process for larger installations (ROO-FIT) process as they are not covered by the MCS. Information on the ROO-FIT process is available on Ofgem’s website.

    Government review of FITs

    The Department of Energy and Climate Change (DECC) have announced they are bringing forward their review of Feed-in-Tariffs which will be completed by the end of 2011 (originally scheduled for 2012).

    The comprehensive FITs review will:

    • Assess all aspects of the scheme including tariff levels, administration and eligibility of technologies
    • Be completed by the end of the 2011, with tariffs remaining unchanged until April 2012 (unless the review reveals a need for greater urgency)
    • Fast track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008.

    Further information is available on the DECC website.

    What payments will you be eligible for, and how can you claim them?

    The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS scheme:

    The following advice applies to domestic installations. If you have installed a qualifying electricity-generating system in a non-domestic property with a grant from the Low Carbon Buildings Programme, see the Low Carbon Buildings Programme website for further guidance.

    Installed before July 15th 2009 and previously collected Renewables Obligation Certificate (ROCs) payments

    • If you contacted Ofgem before 1st October 2011 to get your ROC transferred to the FIT then you will receive 9.4p/kWh for every unit generated plus 3.1p/kWh for every unit exported

    Installed before July 15th 2009 but not registered for Renewables Obligation Certificates

    • If you didn't contact Ofgem by 31st March 2010 to apply for Renewables Obligation accreditation then you won't be eligible for FITs.
    • If you did register with Ofgem by 31st March 2010 then you will receive the flat tariff of 9p/kWh for every unit generated plus 3p/kWh for every unit exported.

    Installed between 15th July 2009 and 1st April 2010

    • You will get full FIT payment if your installation is MCS certified (installer and product). You can apply after April 1st 2010 if you haven’t already.
    • If your installation wasn’t MCS certified and you didn’t contact Ofgem by 31st March 2010 to apply for Renewables Obligation accreditation then you won’t be eligible for FITs

    Installed after 1st April 2010. MCS certificated product and installer

    • You are eligible for full generation tariff and export tariff.
    • Contact your energy supplier, and send them your MCS certificate to tell them you are eligible to receive FITs.
    • If you install after the 2nd year of the scheme your tariff could be reduced, depending on the installation size.

    Installed after 1st April 2010. Non-MCS certificated product and installer

    • Systems that are not MCS certificated will not be eligible to receive the FIT generation tariff or the guaranteed FIT export tariff. There is the possibility of receiving generation and export tariffs outside of the FIT scheme if privately negotiated.
    • You will still benefit from lower electricity bills. The saving will depend on how much of the electricity you generate is used on-site.
    • The one exception to this is microhydro which will be eligible for the ROO-FIT process even if it is under 50kW in size. Enquiries for this should go to Ofgem, email renewable@ofgem.gov.uk

    Small Generators (50kW to 5MW) installed from 15th July 2009

    • If you switched from Renewables Obligation Certificates (ROCs) to FITs before 1st April, then you will be eligible to receive the full generation tariff and export tariff.

    Don’t forget energy efficiency!

    Before you invest in renewable or low carbon energy systems you should always make sure you house is as energy efficient as possible, so that the energy you generate is not wasted. You should ensure you have carried out the following measures:

    • Ensure you have adequate loft and cavity wall insulation.
    • Check you have installed heating controls
    • Replace all old bulbs with low energy lighting
    • Always buy Energy Saving Recommended rated appliances

    These measures will help lower your energy bills, and ensure that the energy you generate is used as effectively as possible.

    Find out how to make your home more energy efficient

    Once your system is installed you should review the way you use energy in the home so you can make the most of the energy you generate. For example, solar electricity panels only generate electricity during the daylight hours, so it’s a good idea to use the washing machine and dishwasher during the day, rather than at night time. This means you can minimise the amount of electricity you have to buy from your supplier.

    Financial support may be available for help with upfront costs of installing energy efficiency measures. Go to the grants and offers page to find out what is available in your area.

    Frequently Asked Questions

    Will I be eligible to receive the tariff if I move into a home that already has an electricity generating technology?

    FIT eligibility remains with the installation, even if the ownership of the home or generating technology changes. Therefore the technology must have been eligible before you move in, even if it is not registered yet.

    What happens if I move home?

    Ownership of the technology is linked to the site and, therefore, in the case where a building or homeownership changes, the ownership of the technology would also transfer to the new owner.

    I rent my property. If my landlord installs an electricity generating technology, who would receive the FITs?

    It will be up to landlords and tenants of domestic or commercial property to come to an arrangement about the receipt of payments and on-site electricity use benefits.

    Will I need a special meter to be able to claim FITs?

    Generation must be metered and FITs payments are made to generators on the basis of metered generation. Meters will need to be able to measure generation, usage and import. However, as an interim measure, DECC has announced that at the very small scale, the amount of exports for the payment of export tariffs can be deemed (estimated), subject to the following:

    • These arrangements will only apply until the finalising of specifications for smart meters;
    • These arrangements do not apply if export meters exist already, or are provided at the generator's expense

    My system is not connected to the electricity grid – can I still claim the Feed-in Tariff?
    Yes you will be eligible to receive a generation tariff at the tariff rate that is applicable for the type and capacity of the generating technology. You will also have to sign a declaration stating that all of the electricity generated on site will be used and not wasted.