solar system fact finder

solar system fact finder

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So there we were putting away our annual tax free ISA allowances into an account over the last few years, comforted by the knowledge that we were receiving a reasonable interest rate and saving for the future and generally feeling warm inside.

Then came the economic turndown. Sitting in our armchairs browsing through our bank statements we began to notice that the interest rate was drooping like a thirsty plant. taking until finally our bank statements seem to wilt before our eyes.

So where do you now make an investment. Is it back under the mattress? What other options are there? What about our roofs?

I have always been interested in technology - and renewable technologies are just an extension of the science fiction I grew up on. The films always painted some desolate vision of the future, and they had to overcome the finite resources of the planet. Similarly I grew up watching Tom and Barbara's cheery faces as they lived out the self sufficiency dream in Surbiton back in the 70's.

Solar PV (photovoltaic) has been around for some time, though is still perceived as an emerging technology. The fact is that they are rapidly becoming more efficient by the day and its an exciting time and also an important time that we consider harnessing such power sources such as the sun ina time where we are on the brink of fuel poverty and already responsible for reporting and trading in carbon emissions.

The Feed in Tarriff

On April 1st 2010, the feed in tariff started in the UK. The idea behind the feed in tariff is that the government struck a deal with all the providers to pay all consumers a tariff just for the generation This is an incentive for everyone to start generating electricity and of course realise the bigger picture regarding our power consumtion and need to provide more sustainable living.

For systems under 4kw the tariff rate is 41.3 pence per unit generated. this is a fixed income rate for electricity generated and used in your home based on the size of your PV array (no of panels and Kwh that they can potentially produce).-

Over 4 kw the rate reduces to 36.1 pence and the rate reduces further to 31.4 pence for a 10-100Kw system.

How does the electricity provider know how much I have generated?

The beauty is you are paid a flat rate based on the size of your pv system and the amount of sun-light (linear average) that is expected annually to hit your panels. This average is based on a location in the midlands.

Some of you may argue that it is milder in other parts of the UK and would experience more sun-light? I'm not here to argue on that point. Perhaps one day the MCS will change this method of calculation depending on your long and lat location, but for now its sheffield.

Some providers will offer you an export meter, which will determine the export rate you get, which is typically between 1 -5pence in addition to generating electricity and could be considered as the export tariff element.

Whats the payment period?

From the day that you have your solar pv system commissioned by a certified MCS Installer, you will be eligible for the feed-in-tariff rate for a period of 25 years. This period loosely coincides with general manufacturer life-time expectancy of the PV panels.

How much will I earn?

On a 2.2kw system, you will earn approximately £800-900 per year, which is tax free also. Multipy that by 25 years, and you will see that repayment period of the system seem quite attractive indeed.

The icing on the cake.

The feed in tariff rate is index-linked so that as inflation changes, so the feed in tariff will be revised and re-publish rates throughout your 25 year term of receiving income from the your electricity provider.

Solar PV is also rapidly coming down in price also, so the repayment periods are shortening constantly and you could look to earning the cost of the system over 3 times over during the 25 years following the install which would see you an average return rate of nearer 10% rather than the 4.5% you are being offered on the high street higher rate ISA's currently.

If you would like to know more or have any further questions regarding a solar pv system, the feed in tariff or anything that concerns you, get in touch and we'll discuss with you the best solution.

Jeremy Malet

http://www.solargen.co.uk

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