Funding

Feed-in Tariffs (FiTs)

On 1st April 2010 the Government launched a new incentive – a “Feed In Tariff” (also being branded as a “Clean Energy Cashback” scheme) - whereby a guaranteed annual payment will be made to PV system owners for electricity generated and exported for 25 years.

As a result, installing a solar PV system offers you a fantastic investment opportunity, as well as enabling you to future-proof your home’s electricity costs whilst also doing your bit to reduce carbon emissions.

The Opportunity

By installing a solar PV system on your home you will get:

• A government-backed, tax-free income stream for 25 years (the Generation Tariff)
• Additional income from electricity fed back to the national grid (the Export Tariff)
• Savings in electricity payments from the clean, renewable electricity generated – i.e. you buy less electricity from your supplier (Avoided Costs)
• Security against rising electricity prices
• A significant reduction in the amount of carbon your household produces
• A manufacturer’s warranty on the power output of PV modules for 25 years (subject to terms).

The government has announced that the Feed-in Tariff scheme will run for 25 years with guaranteed income levels over this period which will also rise with inflation.  The life span of the PV system is however considerably longer than this – up to 40 years according to some manufacturers – so even when the tariff scheme ends you will carry on benefitting from free electricity for years to come.

The Tariffs

The tariff levels confirmed by the Department of Energy & Climate Change for each kilowatt hour (kWh) generated by solar PV systems vary according to the kilowatt peak (kWp) size of the system.

Generating tariffs for solar PV are as follows:

Feed-in Tariffs (FiTs) Tax free income

Tariffs will be exempt from income tax. This means that domestic users and other income tax payers will not be taxed on any income received from the Feed-in Tariffs.

The Renewable Heat Incentive (RHI)

The Renewable Heat Incentive (RHI) is a new payment being introduced in the UK for generating heat from renewable sources. It is very similar to the Feed-in Tariff and was introduced through the same legislation – Energy Act 2008. The Renewable Heat Incentive is payable to anyone who has a renewable heat systems installed by an MSC Accredited Installer – homeowners, tenants, businesses, schools, hospitals, farmers or landlords.

The RHI is scheduled to go live on June 1, 2011. The new Coalition Government confirmed its support for the RHI in the October 2010 Spending Review.

How it works
Through the Renewable Heat Incentive, generators of renewable heat will be paid a figure which has still to be confirmed but thought to be around 18p per KwH for the hot water and heat they generate and use themselves. The RHI tariff depends on which renewable heat systems you use and the scale of generation. As such, users will earn enough money from the tariffs to pay off their installation costs in about five to nine years.
Renewable heat installations commissioned since July 2009 will receive a cash-back subsidy, based on the deemed heat requirement of a building, for the lifetime of the equipment used.

Almost half of the final energy consumed in the UK is in the form of heat. Its generation accounts for 47% of UK CO2 emissions. Renewable Heat currently satisfies less than 1% of heat demand.

The Renewable Heat Incentive is part of the Government’s commitment to aim for 15% renewable energy by 2020.

Eligible systems

As an MSC Accredited Installer, a Sun Harvester solar panel hot water system is eligible to receive the Renewable Heat Incentive. In fact, we’ll even register your commissioned installation for you.

Renewable Heat Incentive (RHI) Tax free income
Tariffs will be exempt from income tax. This means that domestic users and other income tax payers will not be taxed on any income received from the Renewable Heat Incentive.