The Feed in Tariff
The Feed in Tariff is a government incentive to encourage businesses to create their own electricity by using Solar Panels (Solar PV).
For many organisations it is the combination of income and improved green credentials that makes Solar Panel installation worthwhile.
Is it guaranteed?
The government have guaranteed the Feed In Tariff for 20 years. Payments are guaranteed to rise with inflation, aligned to the Retail Price Index (RPI).
What is the return on investment / does it pay?
The ROI on Solar PV is around 5% - 8%, depending on how efficent / well sited you installation is. At Solar Power Lincoln we work with you to ensure you understand the potential returns for your specific project.
Will my electricity bills be reduced?
Your solar panels produce electricity which can be used just like your normal supply, or 'exported' to the national grid. In general when you are using electricity that you have created you're saving more than you would be exporting it to the grid. Our smart technology handles this automatically, ensuring that you use the cheapest electricity first, and then export any spare capacity.
How do the FITs work?
The feed-in tariff comprised of three components:
- A fixed and guaranteed payment from your electricity supplier for every kWh your system generates. This is 'the generation tariff'.
- A guaranteed payment for surplus electricity that is not used on site, which is automatically exported to the grid. This is 'the export tariff' and is paid by your electricity supplier.
- Finally, you are able to use the electricity generated on site, so you will need less from the national grid, therefore your energy bill will be lower.
The rate is linked to the retail price index for the whole life of the tariff.
Will I need to pay tax on the income?
Businesses will be taxed on income, domestic installations are not subject to income tax.