Earnings from Solar Panels with Feed In Tariff
Solar PV installed by any of our MCS accredited installers are eligible for the Feed In Tariff. Your home must also have an energy efficiency rating of D or above. An Energy Performance Certificate grades the energy performance of your home. Having cavity wall insulation, solid wall insulation, loft insulation or double glazing – all contribute to an improved energy efficiency rating.
Once registered for the Feed In Tariff (our trusted solar installers will explain the registration process), you’ll be paid for excess electricity that your system generates. The Feed In Tariff is made up of the Generation Tariff which is a fixed rate which is determined at the time of registration onto the Feed In Tariff Scheme, and the Export Tariff which is paid based on electricity units that are not used by your property, but instead exported back to the National Grid.
The Generation Tariff part of the Feed In Tariff is guaranteed for 20 years and is Retail Price Index linked. The rate of payment is reviewed every 3 months by the Government, but once registered on the scheme, the rate is guaranteed for up to 20 years. For the period 1st July 2015 to 30th September 2015, new solar panel systems registered on the scheme typically make the average homeowner £653 per year in tax free earnings based on the current feed in tariff rate. You can get a very accurate assessment of your earnings from solar panels by using the solar calculator. As mentioned earlier, solar earnings do rise in line with inflation.
Because the Government has cut the Feed In Tariff and these cuts look likely to continue, the earning potential from solar panels is reducing. However, this is balanced by the drastic decrease in installation cost. However by getting solar panel comparison quotes, you can save even more money on installation just by shopping around – in the same way you would when you would get at least 3 quotes for other types of home improvement.
The current Feed In Tariff rate for installations after July 1st 2015 but before October 1st 2015 on a 4kW or less system to a new build or occupied property is as follows:
Higher Rate: 12.92p per kWh
Middle Rate: 11.63p per kWh
Lower Rate: 5.94p per kWh
The higher rate is achieved when your EPC is a band D or above – which we recommend you achieve in order to maximise your profit from solar panels.
Energy Minister Greg Barker has said that those approaching retirement should consider investing some of their pension cash in solar panels. Due to the fact that solar panels deliver a financial return of between 5% and 8% per year, this beats the return provided by pension annuities.