The Feed in Tariff (FIT) scheme guarantees a minimum payment for all electricity generated by the solar power system, as well as a separate payment for the solar electricity exported to grid. These payments are in addition to the bill savings made by using the electricity generated on-site.
Once you have a solar panel system installed you will immediately see a reduction in your electricity bill and then receive an income from your Feed-in tariff provider.
A Solar PV system provides benefits in 3 ways;
1. Generation tariff – a set rate paid by the energy supplier for each unit (or kWh) of electricity you generate. This rate will change each year for new entrants to the scheme (except for the first 2 years), but once you join you will continue on the same tariff for 20 years. At present the rate for most domestic projects is 15.44p/kWh, but this is subject to a planned degradation, for more information on FiT rates click here.
2. Export tariff - you will receive a further 4.64p/kWh from your energy supplier for each unit you export back to the electricity grid, that is when it isn’t used on site. The export rate is the same for all technologies.
3. 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.
Deemed export - Domestic FIT installations are likely to have their export deemed (estimated) at 50% in most cases until smart meters are rolled out.
As an example, a typical domestic solar electricity system, with an installation size of 4.0 kWp could earn around:
This gives a total saving of around £690 per year.
To see the OFGEM Feed in Tariff tables click HERE