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The government has an objective to reduce UK carbon emissions by 80% by 2050 which has led to the introduction of Feed in Tariffs (FITs); a scheme that rewards customers who generate and use sustainable electricity. Installing Solar PV panels with npower will mean you're eligible for a quarterly payment for all the electricity you generate and any surplus electricity you generate that is exported to the national grid.
For more information on Feed in Tariffs visit the Energy Saving Trust
Feed in Tariffs will pay you for every kWh your Solar PV system generates. This makes up the majority of your income. All you have to do is provide a quarterly meter reading of what you have generated and you'll receive a payment that is tax free, increases annually with inflation and is guaranteed for the lifetime of your Solar PV system.
It’s estimated that 50% of the electricity you generate won’t actually be used in the home and therefore is fed back to the national grid. FITs will pay you for every kWh assumed to be fed back or “exported”.
On top of Feed in Tariffs, the electricity you generate is free to use in your home. Although you'll never eliminate the need to import electricity (especially when the sun sets!) it's estimated that Solar PV can reduce the average electricity bill by 25%. If wholesale energy prices continue to rise then you could benefit even more from using your own, sustainable source of electricity.
A 4kWp system registered before the 1st of November could generate an income of £845 a year in Feed-in Tariff payments and savings on your annual electricity bill.
|Savings on Electricity Bills||£264|
|System cost (payback)||9 years|
|Annual rate of return||10.9%|
Already installing Solar PV? Learn more about Feed in Tariffs through npower
Table of Calculations explanation:
Tax free: Generation income would be tax free provided that the generation income is not received in a business capacity (e.g. the individual must not be running a business from their house) and that the individual is not providing a form of service or facility in connection with the electricity being generated. The export income would be tax free provided that Solar PV qualifies as a “microgeneration system” as defined under the Climate Change and Sustainable Energy Act 2006 and that the system is installed at or near domestic premises occupied by the individual and they intend that the amount of electricity generated by it will not significantly exceed the amount of electricity consumed in those premises.
"Generation", - the amount of energy (measured in kWh – Kilowatt Hour) produced by a microgeneration system, Based on average industry SAP calculations for an optimum system in an average UK home and a south facing array at 30˚ pitch with no shading and subject to average UK weather conditions (The Government’s Standard Assessment Procedure for Energy Rating of Dwellings 2009).
"Generation Income", - the amount paid to you for every unit of electricity generated from your solar PV system, assumes DECC’s current FiT generation income of 15.4p for customers with a Solar PV system under 4kWp in size – as per www.ofgem.gov.uk/fits
"Export", - the amount of energy (measured in kWh – Kilowatt Hour) generated by your microgeneration system exported back onto the grid. Amount exported may vary depending on generation and your electricity usage. Assumes household uses Ofgem’s typical medium annual consumption of electricity (3,300kWh) and that 50% of generated electricity is exported onto the grid.
"Export Income", - the amount paid to you for every unit of electricity generated by your microgeneration system which is then exported back onto the grid. Assumes DECC’s current export tariff of 4.64p. Export income is tax free however, it is subject to VAT if the customer is VAT registered. The Secretary of State reserves the right to change the FIT rates.
"Electricity Bill Savings". - Based on year zero costs with no degradation or inflation applied, and on the Energy Saving Trust’s estimated current average electricity price of 14.4p per kWh, Ofgem’s average UK household annual consumption of 3,300 kWh and a system size. Assumes 50% of all electricity generated will be used in the home. These savings are for customers installing after 15 July 2009. All existing customers registered for the Renewables Obligation before this date will be subject to different FIT rates.
"Total annual income and savings" – Doesn’t include any maintenance costs or any tax implications.
#25% savings: Energy Savings Trust website source (April 2011).
Terms and conditions apply and will be subject to a property survey. Installation is provided by Evoenergy Ltd and you will need to enter into a contract directly with Evoenergy for its supply and installation. In such case, npower does not warranty or represent and is not responsible for the quality, fitness for purpose or otherwise of the PV system or its installation and any other equipment provided by Evoenergy Limited, nor for the actions or omissions of Evoenergy Limited or any installer used by Evoenergy Limited.
Annual Return on Investment: Calculation based on a 4kWp Solar PV system located in optimum conditions for an average UK home, with a south facing array at 30º pitch and no shading. Cost of the system based on npower’s average installation costs for a 4kWp Solar PV system. Actual costs will vary depending on site. Assumes generation of 850 kWh per 1 kWp installed with generation income based on DECC’s current FiT rate of 15.4p for customers with a Solar PV system under 4kWp in size (as per ofgem.gov.uk/fits) and export income assumes 50% of generation exported onto the grid at DECC’s current export tariff of 4.64p per kWh. Electricity Bill Savings based on the Energy Saving Trust’s estimated current average electricity price of 15.3p per kWh, Ofgem’s average UK household annual consumption of 3,300 kWh and 50% of all electricity is used in the home. Does not include any maintenance costs or tax implications. No two installations of the same type and scale are likely to produce the exact same level of generation each year for the same cost, and thus rates of return can vary between installations. Example provided is for illustrative purposes only and does not constitute financial advice.
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