Since the intoduction of the government’s feed-in tariff scheme in April 2010, renewable energy and the potential for individuals to cash in has been a running theme in the British media. While certain newspapers have taken a negative view of the potential for green energy and an even dimmer view of some of the companies attempting to take advantage of the new legislation, there is little doubt that feed-in tariffs have had a big impact on the British mindset on renewables.

Historically reactive and often adverse to change, the British public is becoming increasingly aware of the financial rewards that can come from investing in renewable energy based on feed-in tariff pay outs both for the energy used by the household and energy fed back into the national grid. Once commercially unviable, feed-in tariffs work by offering premium, guaranteed rates to renewable micro-generator thus off-setting the high costs of solar panels while offering attractive returns to investors over a period of 20-25 years. This financial mechanism has led to a great deal of companies springing up with offers to fit solar panels to households for free, the benefit to the homeowner being reduced utility bills and the benefit to the companies being long term returns from the tariff.

Indeed, British Gas research alone has shown that the tariff will spur around half of Britain’s homes to eventually invest in solar panels, bringing in an annual revenue of between £600 and £1000. The national grid, which has been criticised of late for its perceived inability to cope with the shift towards green energy has released findings about the future for solar energy in the UK. Certainly, with the UK on target to meet its climate change targets within the next decade, it seems that solar photovoltaic (pv) should also go from strength to strength on the back of the tariff legislation. The national grid has shown that within the next 10 years around 31,950 MW of solar panels will be connected.

The national grid has shown that around 29,000 MW will be needed to exceed government targets of generating 15 per cent of energy by renewable means. This would mean enough energy to power around 20 million homes, a massive change in the way energy is both generated and consumed in the UK. The national grid has shown that while we are certainly on the right track in order to bring about a root change in the way the UK generates energy, the government has to remain focused on renewable energy. With a review of tariff rates due, it will be essential that the government maintains a tariff rate which continues to incentivise long-term investment.

Scottish and Southern Energy (SSE) has joined the growing list of companies offering solar photovoltaic (PV) schemes to its customers. The SSE solar PV scheme will harness the feed-in tariff to enable its customers to benefit from free electricity generated by the solar panels installed on their roofs. The plan which will see SSE install panels for free on roofs found to be suitable for solar energy follows in the footsteps of a number of other businesses currently running free energy schemes.

The feed-in tariff enables small scale solar pv generators to benefit from guaranteed, premium rates set out by the legislation. In the case of the SSE scheme, households will benefit from free electricity by having solar panels installed on their roofs. Speaking as National Development Manager for SSE, Alan Evans said,

“The introduction of feed-in tariffs (FiT) has changed the economics of micro-renewable generation in a very positive way. However, for many customers the initial outlay required to benefit from these tariffs is still too great. SSE has set up this deal to ensure that there is no outlay by the customer and that they will benefit from free electricity as soon as the system is connected.”

Of course, the greater benefit is for SSE micro-renewables who are able to benefit both from the solar panels and feed-in tariff over the project’s 25 year lifespan. Indeed, the 25 year tariff will enable SSE to benefit from 41.3p per kilowatt hour for electricity generated by the panels and 3p per kilowatt for energy fed back into the grid. With this scheme in place it is expected that a typical household adopting the solar scheme could save around £130 a year on their electricity bill.

Emphasising the benefit to his customers, Evans went on to add,

“Customers also have the reassurance that their contract is with one of the UK’s largest energy companies, with a track record of installing solar PV that extends over more than five years and is backed up by an excellent reputation for customer service.”

Heating contractor EAGA are piloting a solar scheme across council homes in Welwyn Hatfield Council in a project designed to add hundreds of solar photovoltaic panels to households. In a scheme similar to carbon reduction programs happening all across the UK, the Hertfordshire scheme will utilise the feed-in tariff in order to save money and of course, reduce carbon emissions.

The feed-in tariff works by offering fixed, premium rates for units of energy generated by small scale renewable energy projects exactly like the one piloted in Hertfordshire. The EAGA scheme will seek to save each household money on fuel bills because of the obvious savings on electricity. As well as the financial rewards to the scheme, the solar photovoltaic installations will save around 1200kg of CO2 a year per household.

Across the 25 year life time of the scheme this equates to 30 tonnes, a sizeable amount which if replicated elsewhere would certainly contribute significantly to UK carbon reductions. Suitability for the solar scheme will obviously depend on such factors as aspect and roof size, however a large number of council schemes across the UK will inevitably cotton onto the EAGA project and seek to make carbon reductions and indeed generate revenue through the feed-in tariff.

Councillor Roger Trigg said with regards to the Welwyn project,

“We are proud to start the New Year with such a positive and innovative scheme, which will mean real savings in our tenants’ energy bills and their overall carbon footprint. We recognise how important it is for our tenants to manage the cost of keeping their homes warm and comfortable. Our homes have already been recognized as some of the most thermally efficient in the UK, and this strengthens our commitment to energy efficiency even further.”

While there is currently a focus on government spending cutbacks, such council schemes indicate how renewable energy, twinned with the feed-in tariff can be a real, viable means of both reducing carbon emissions, saving money and ultimately, helping to boost industry and create much needed jobs.

Solarfeedintariff.co.uk has received hundreds of enquiries asking how the coalition government’s Spending Review will impact on feed-in tariffs. Feed-in tariffs, in the UK known as the Clean Energy Cash Back scheme were introduced as a way of incentivising investment in green energy through the payment of fixed, premium rates for energy generated from small scale renewable projects. Most of the enquiries coming through this website have focused specifically on how the Spending Review will affect UK solar projects so we will seek to answer some of the most popular queries.

How will the Spending Review affect Feed-in Tariffs?

The Department of Energy and Climate Change (DECC) has stated that the tariffs will now be focused on the most cost-effective technologies and fortunately, this includes solar pv. The DECC has said,

“Feed-in tariffs will be refocused on the most cost-effective technologies saving £40m in 2014-15. The changes will be implemented at the first scheduled review of tariffs [in 2012, to kick in 2013] unless higher than expected deployment requires an early review.”

While rates for solar projects will remain unchanged, the government has announced that changes could be made in the 2012 review which could see the tariff cut by 10 per cent in 2014 and 2015. Rates paid by the tariff could be effected by what the DECC have termed a ‘Trigger Point’ where a figure for solar installation is met, reducing the tariff payments.

When will the Trigger Point take affect?

No announcement has been made as yet on the Trigger Point criteria but is likely to revolve around something like installed capacity or applications to install. We will not hear anything until 2012 at which point the government will have to revisit the legislation because currently there is no mention of trigger points in the tariff scheme.

When is the best time to install?

Perhaps one of the most common questions coming to us through our website is the question of the best time to install solar pv panels in order to start taking advantage of the feed-in tariffs. Our answer is always, right away! As it currently stands, you will be able to take advantage of rates of 41.3p until 2012 for units of energy generated from your solar panels. If, however there is a massive take up in solar installation within the next 2 years, the government may decide to reduce the tariff for future installations.

How will any changes affect people who have already installed?

It won’t. Contracts are fixed meaning that anyone who signs up for a tariff rate of 41.3p for units of energy generated can expect those payments for the next 25 years.

Solarfeedintariff.co.uk along with a number of environmental groups are happy with the way solar pv projects are safeguarded amongst the government’s drastic spending review. Now is certainly the time to take advantage of high tariff rates and generate revenue for your household for the next quarter of a century.