Feed-in tariffs

10th June 2010

Feed-in tariffs, brought into the UK in April this year, encourage home owners to invest in renewable electricity sources by paying them for the electricity they produce.

A similar scheme for renewable heating, The Renewable Heat Incentive, is going to be available from April next year.

Who is eligible?

Anyone who installs a renewable energy system that produces electricity after 15th July 2009 can claim tariffs as long as they produce less than 5MW of power. This means that virtually every property in England, Scotland and Wales is now eligible.

How much can you save?

An average household uses around 4,500kWh of electricity a year. As an example, if that average household had 2 ½ kW of solar photo-voltaic (PV) panels installed, the electricity generated will earn the homeowner £856 a year tax-free.

The remaining electricity costs will be reduced from £450 to £300 making an additional saving of £130 a year. So in total, the homeowner would make a total annual benefit of £986 a year.

The costs for installing solar panels starts from about £10,000 and it is said that feed-in tariffs will reduce the installation "pay-back time" by around 4 years from 14 years to 10 years.

If you use more energy than you produce, you would have to buy the electricity from your supplier in the usual way but you would still be buying a lot less so continuing to make a saving.

Other benefits

Lack of fossil fuel and rising prices will contribute to a predicted 60 per cent rise in energy bills by 2020. By converting to renewable sources you will not be impacted as much by this costly rise in prices.

For more information, visit Feed-In Tariffs Ltd.