G. W. & J. Ward: Electrical & Renewable Energy Installations
Renewable Energy Tariffs
What are Renewable Energy Tariffs?
The Feed in Tariff (or Clean Energy Cashback Scheme) was introduced by the government from April 2010 to encourage
domestic and business electricity consumers to use energy from their own
renewable sources.
The government scheme has three main incentives:
-
A Generation tariff: a fixed amount is paid to the
customer for each kilowatt hour generated from renewable sources.
-
An Export tariff: an extra payment (in addition to the
Generation Tariff) for each kilowatt hour generated surplus to your
requirements which is 'exported' to the National Electricity Grid
through your electricity supplier.
-
The satisfaction of generating your own 'clean'
electricity and not having to pay for each unit produced.
Not only do customers save on energy bills for each unit
which is self-generated, but the 'selling' of unused units is a huge
incentive because this income helps to pay off the initial cost of
installation over a much shorter period of time. The Tariffs are guaranteed
for 25 years.
Qualification
Only systems from installers accredited by the
Microgeneration Certification Scheme are eligible for the Feed in Tariff. G.
W. & J. Ward are certified installers of the high quality systems needed to
take advantage of these benefits.
How it Might Work
If a customer uses 4000 units per year at an average cost
per unit of 15p, the cost of the bill is £600.
A 3kw Solar Photovoltaic Panel system might typically
generate 2500 units during a year. Experience suggests that about half of
this electricity will be used in the home and half put back into the Grid.
Payments to the customer would be:
-
Feed in Tariff (41.3p per unit generated): 2500 units
@41.3p = £1032.50
-
Export Tariff (3p per unit exported): 1250 units @3p =
£37.50
In total £1095.
and
-
Savings on 1250 units generated out of 4000 consumed:
1250 units @ 15p per unit = £187.50
This reduces the cost of the annual electricity bill to
£412.50 and with the tariffs included produces an overall 'profit' of
£657.50. With Feed in Tariffs guaranteed for 25 years, the cost of the
initial outlay on the Solar Photovoltaic system is a sound investment.
Before undertaking any installation, you should have a
detailed survey by a qualified installer and compare the installation cost
with the proposed returns from the tariffs, which are designed to operate
over a period of 20 years (25 years for photovoltaic systems). It is
recognised that nearly all properties will recoup the full cost of the
installation over the tariff period and that many will generate an income.
Larger properties are more likely to produce a greater net return.
Who Pays?
The major electricity supply companies are committed to
supporting this scheme. To benefit from the Feed in Tariff, customers will
require a generation meter to track the exact amount of electricity
generated. Payments are made on ACTUAL readings.
Where's the Catch?
There isn't one! The government recognises that people
cannot be expected to outlay several thousands of pounds on renewable energy
equipment without adequate incentive. Simply not paying for what you
generate will not encourage sufficient people to achieve the government's
15% target for renewable energy generation, so there are guaranteed tariff payments over a 20-25 year
period.
But don't wait too long! There's no guarantee that future
governments will continue to offer such generous tariff returns for new
installations in the future.
