The Feed-In Tariff was introduced to the UK on April 1st, 2010 as an incentive for people to take up renewable energy options as opposed to relying solely on the National Grid for power. The principle benefit of the scheme is to save money on electricity bills – something most households would relish! However, the Feed-In Tariff is coming to an end on March 31st this year when new applications for the scheme will no longer be accepted. So, if you’ve ever considered installing a solar panel system, now is a great time to push ahead!
The Feed-In Tariff is comprised of three elements:
- Generation tariff – the fixed rate paid per unit of energy (kilowatt hour / kWh) your system generates. The rate is set according to the size and type of installation.
- Export tariff – any electricity not used by the household and therefore going spare is fed back to the National Grid. It is assumed, 50% of all electricity generated will be exported to the grid and the tariff is paid out on this basis.
- Savings – because you’re generating your own electricity, you’re not pulling electricity down from the grid. Therefore, you’re not paying for it!
Solar panels are just one type of renewable energy source that qualifies for the scheme. Your system must be installed by a firm accredited by the Microgeneration Certification Scheme and the system itself must be MCS-accredited. Once installed, you receive an MCS certificate which you present to your energy supplier who will arrange the set-up of the Feed-In tariff.
So, is it worth it? Let’s take a look, in real money, how much a solar panel system saves the average household. To help break the figures down, ASK Renewables presents a real-life case study, highlighting the real benefit of being part of the current Feed-In Tariff Scheme.
In 2018, the average electricity bill for a 3-bedroomed semi-detached house was £1138 (Rowe, 2018). Our case study uses a 3-bedroomed semi-detached house in Wakefield, with two adults and one child.
- 12 x 280W panels, with a total capacity of 3.36kW
- 1 x 2.4kW battery – to store excess generated power for later use
Other – 1 x 5kW Multifuel Stove/Burner
- Electricity Usage – 2018
5th January to 29th December: 1465 kWh: £258.37
Gas Usage – 2018
5th January to 29th December: 9495 kWh: £364.27
Total Gas and Electricity bill for 2018: £622.64
Total Power Generation:
23rd December 2017 – 29th December 2018: 2681 kWh
The current generation tariff (No. 1 listed above) which runs until the close of the scheme at the end of March pays £0.0379 per unit of kW generated. The Export Tariff (No. 2 listed above) assumes an export of 50% of total generation and pays out at £0.0524kWh.
The panels produced a total of 2681kWh which multiplied by the generation rate of £0.0379 delivered a cash benefit of £101.60.
As it is deemed 50% of all power generated is fed back to the grid, 1340.5kWh multiplied by the feed-in rate of £0.0524 produced a cash benefit of £70.24.
So, the total cash benefit to this household was £171.84.
Assuming an average rate of £0.15 kWh cost for power from the grid, by self-generating 2681kWh, this household save £402.15.
The total benefit in this case study, cash and savings combined, was therefore £573.99 for 2018.
Using the same generation figures and putting them against 2019 Feed-In Tariff rates the figures look even better:
Generation + Export will still produce a cash benefit in the region of £171.84. Given the average household bill is £1138
Example based on actual power usage and power generation using 2019 Feed-In Tariff rates:
(Generation + Export) Feed-in Tariff = £171.84 pa cash benefit
Savings against average bill of 2018 = £515.36
Total example benefit = £687.20!
Further savings can be made by combining a solar panel system with a battery storage system. This allows you to store the unused power you’ve generated, rather than giving it to the grid. This means you can use your own power in the evenings when the majority of people are home and using power – power you would otherwise be drawing from the grid – and paying for!
Until March 31st, new applications for the Feed-in Tariff are being accepted and the Government has decreed the tariffs will continue to be paid out for the next twenty years. However, any new solar panel system installed after the end of March will be on a different, and as yet, undetermined scheme with the rate customers receive for their power generation as yet uncertain. That rate will be set by the utility company, rather than by the Department for Business, Energy and Industrial Strategy (BEIS).
So, with just one month left until the Feed-In Tariff as we know it disappears, don’t delay. If you’re considering a solar panel system, get in touch on 01226 715522 for a no-obligation chat about your requirements. We’ll talk it through with you and see if it’s right for you!
Rowe, C., 26 June 2018. The Money Advice Service [Online]. [Accessed 25 February 2019]. Available from: https://www.moneyadviceservice.org.uk/blog/how-much-is-the-average-gas-and-electricity-bill-per-month