You may have seen a solar PV installation on a house in your street or walked or driven by a house with one on. You might have heard about the solar grants that you can get for installing solar or even read about free solar panels. If you are new to the world of solar then the many aspects that cover solar and the associated benefits can seem confusing. So let us look at the reason most people are installing solar; for the feed-in tariff payments.
Solar panels grants or as the proper name for the scheme; feed-in tariffs (some still call it the clean energy cashback scheme) is a government scheme to encourage the take up of clean and green technologies that generate electricity. For now we are only going to focus on the solar photovoltaic aspect of the scheme as this is the one that most people are interested in and for most people the most practical renewable technology.
The tariff pays you for every kilowatt of clean electricity that you generate from the solar panels you get installed. It is the person or company that pays for the panels that gets the tariff payments so if you had free solar panels it would be the installer that gets the money. These solar grants are paid to you on a quarterly basis by your energy supplier. At the current rates with a 4kWp system you could be getting about £1,500 a year.
The FIT payments are tax free just like an ISA and are guaranteed by the government for 25 years. So from the date you have the solar panels fitted and registered you will have 25 years worth of payments coming to you. The amount that you get is based on the amount of electricity, measured in kilowatts, that your panels produce. The more they produce the more you earn so the larger the system you have installed the more you will get.
At the moment up until the end of March 2012 the rate per kilowatt is 43.3 pence so if you install prior to this date you will be guaranteed this amount for every kilowatt that you panels produce. With a 4kWh system that could be around 3,400 kilowatts over the course of a year. Every year the rate you get paid for every kilowatt increases with inflation, the RPI or retail price index is used to calculate this. So if you joined the scheme in 2011 you would have started at a rate of 41.3 pence and that rose to 43.3 pence due to increases in the RPI.
Over time the starting rate for people installing new installations will decrease, you can see the current list of rates on the feed-in tariff page. This essentially means that every year the tariff rate that new installations attract will be lower so the sooner you install solar the more you will get paid. The reason for the rate drop is because the cost of solar is expected to fall so that the amount of incentives needed decreases.
In order to be able to claim the grants you need to invest in your own solar PV system. This means that you have to buy your own system, the cost of solar panels varies and prices currently start from about £4-5,000. Your investment will more than be paid back to you with the amount that you receive in tax free payments through the feed-in tariff scheme. The market is very competitive so make sure that you get at least 3 quotes for solar.
The process from start to finish with solar starts with contacting installers to get quotes. You can get a rough idea of costs but you need to have a free site survey first.
The survey should be free, if an installer wants to charge you up front for a solar survey then there are plenty of other installers that would love your business. The survey looks at the suitability of your house, more specifically your roof as this is usually where the panels are installed. It should check that your home faces the right direction for solar panels, what you need to know about your homes suitability: Is my house south facing?
There are other checks that should be done, most importantly whether your roof can take the weight of the panels and whether your roof is subject to any shading. Roof strengthening can be carried out, the installer may include this in the cost and is likely to cost a few hundred pounds to do. The reason your roof needs to be checked is not because the roof will collapse under the weight of the panels but over many years the wooden frame of your roof will warp if the panels are too heavy for the structure.
A free survey will also identify any potential shading problems. Shade cast on the panels from other buildings or tall trees will reduce the efficiency of your system. This can be a particularly more significant problem during the winter months when the sun is lower in the sky increasing the chance of shading from nearby tall objects. A small amount of temporary shading should not be a problem; it is when shading occurs over longer periods that will cause problems.
In order to be able to claim your feed-in tariff payments the government requires that both the installer and the solar equipment used be certified under the Microgeneration Certification Scheme. This is a body set up to ensure both installers and equipment not only meets certain standards but that these standards are continually maintained. Installers are required to be annually assessed in order to maintain their certification. You can check that your installer is registered by searching for them on the MCS installer database.
Once the system has been installed the installer will register the system with the MCS. Once registered you will get a certificate to show that you have a certified solar installation. You are then able to contact you energy supplier who will then verify you are on the MCS database and start initiating your clean energy cash back (feed-in tariff) payments. Unless other arrangements have been made your supplier will pay you on a quarterly basis.
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Grants & Schemes
Installing solar panels to produce electricity could earn you up to £1,200 a year. These payments are tax free, index-linked and guaranteed for 25 years.
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