These FAQ are intended to explain some of the Frequently Asked Questions about the UK Feed-in Tariff.

1. ‘Feed-in Tariff’ or ‘Clean Energy Cashback’ Scheme - Are they the same thing?
2. Where does the money come from?
3. How much money will I make if I install solar?
4. How do I join and by when do i need to sign up?
5. What if I move house?
6. Is it just for homes?
7. Does the scheme cover Solar Thermal as well?

1. ‘Feed-in Tariff’ or ‘Clean Energy Cashback’ Scheme - Are they the same thing?
Yes. ‘Feed-in Tariff’ is the internationally recognised name for incentives which guarantee rewards for producers of clean energy over a period of years. It’s actually not a very good name for the UK scheme, because it implies you only get paid for ‘feeding energy into’ the grid, when actually you get paid for every unit you generate. A better, more descriptive name would be the ‘renewable energy generation tariff’.

2. Where does the money come from?
The money to pay the producers of green energy comes from a small levy on every energy consumer.

3. How much money will I make if I install solar?
It all depends how much you install, where you are in the UK and which way your solar faces.
Say you have a south facing roof (south is best, but east and west still work too) at about a 35 degree pitch in southeast England and installed a 2.5kWp (roughly 20 square meter) system. That would cost you about £12,500 at today’s prices.

A 2.5kW PV system will generate about 2,125 units (kilowatt hours kWh) of electricity per year and the generation tariff is 41.3p per unit.
 As well as receiving the generation tariff for every one of those units, you’ll typically use about half of that in your house, and export the rest to the grid, resulting in a payment for the exported units at 3p per unit.
 And, if you use half the electricity that is generated, you save buying regular electricity at 13p / kWh:

Income from generation tariff (2125 x 41.3p) = £877
Income from electricity sales (1062 x 3p) = £31
Savings on avoided electricity purchases (1062 x 13p) = £138
Total annual income + savings = £1046

On your investment of £10,000 you could get back approximately 10% per year.

The amount might vary a little each year depending on electricity prices, but that’s a pretty healthy investment. Over the 25 years for which the tariff is guaranteed, we estimate you’d have a combined income and savings of nearly £26,150 based on this example, which will give you a modest profit on your original outlay. And the great thing about solar PV is its life span is even longer than the tariff, so you would carry on benefiting from free electricity for years to come!

4. How do I join and by when do i need to sign up?

Once you have selected an MSC approved installer, chosen your solar product and it has been installed, your installer will give you a certificate proving the instalation is complete. Next you will need to apply to your energy comany (or a different one if you like - your supplier and the company that pay you the feed-in tariff do not have to be the same) to claim the feed-in tariff.

People who sign up in the first two years (April 2010 - April 2012) will get the best rate (41.3p per unit for a retro-fit installation smaller than 4kWp) for the 25 years of the tariff. If you sign up in the next year (April 2012 - April 2013) you will get 37.8p per unit for the duration of the tariff. So, if you are going to get solar installed and sign up, do so as soon as possible!

5. What if I move house?
If you get solar installed and start claiming the Feed-in Tariff you will have lower bills AND a steady income from the FIT payments. This means you will be able to sell your house at a higher market value (both for the capital you have spent on the system AND the savings and income, which are guaranteed for 25 years). Then you simply sign over the FIT paperwork to the new owner and they take over the system with the house. It does not make sense to try to take your solar system with you, you would be better off selling it with the house and buying a new one for your new house.

6. Is it just for homes?
No, the following list details the different rates of the FIT for different building types and system sizes:
If you own a business with a large roof and/or high electricity usage this could be a very wise time to invest!

Additionally you’ll get another 3 pence/kWh for every unit you export to the grid.

7. Does the scheme cover Solar Thermal as well?
No. The scheme only covers Solar Photovoltaics.

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