What is a feed-in tariff?

A feed-in tariff system is designed as an incentive for energy producers to move away from conventional fossil fuels to renewable energy sources. it is government legislation which guarantees a fixed, premium rate for renewable electricity fed into the national grid. The power companies are obliged by the government legislation to buy the renewable electricity, the additional costs of which are passed onto the customers.

The Scheme will be introduced on 1st April 2010. From this date home and other property owners who install solar electric (PV) systems will be paid a premium for all of the electricity they generate and additional payments for electricity they do not use locally and export to the grid.

• The feed-in tariff is set at a level dependant on size
• There will be an additional payment of 3p for the units exported to the grid
• The payments are guaranteed by law for 25 years
• The payments are index linked and will rise with Retail Price Index inflation
• For domestic properties the revenue is tax exempt

All installations must be carried out by an MCS-approved installer, using MCS-approved products to qualify for the feed-in tariff. All accredited installations from July 2009 onwards will be eligible. The tariff is guaranteed for the next 25 years, although the rate given in the first year will fall by 7% for new installations after 2 years, the rate given in the first year of install will continue for the lifetime of the tariff.

How can Ardenham Energy help ?

As a Microgeneration Certification Scheme (MCS) approved installer, you can be sure of qualifying to receive the full benefits of the feed-in tarrif by having your solar PV or wind turbine system installed by Ardenham Energy.

We have developed an Excel spreadsheet to show the likely returns for solar PV installations under the feed-in tariff. This can be downloaded from our Downloads page.

Domestic Solar Installation - a worked example with Feed-In Tarrif.

A 3.24 kWp Solar PV array for a  domestic south facing property will cost in the order of £12,000 including 5% VAT. Taking into account the revenue at 41.3p/kWh from generation, the offsetting of imported energy (13p/kWh) and revenue from exported energy (3p/kWh) and taking into account the revenue is tax exempt (40% rate assumed), it can be shown  returns of 20% can be acheived.

What should I do next ?

• Check our price pages to see the costs and likely returns for the size of system you are interested in by clicking on the relevant link below.

• Download a copy of our Feed-In-Tariff Returns Calculator and Site Survey Form from the downloads page.

• Call Ardenham Energy if you have any further questions or would like to arrange a site survey.

• The Energy Savings Trust publish a very helpful guide. This can be accessed by clicking here

• Ofgem who administer the scheme have a Feed In Tariff page on thier website. This can be accessed by clicking here  and download the Ofgem FIT Factsheet here

Notes:

Domestic payments will be exempt from tax.

The generation payments will be index linked

The equipment and installation must be undertaken by a certified manufacturer/installer

For more information please contact Ardenham Energy.