Guide to the UK feed in tariff solar grants

If you live in the UK there are a number of green grants available for anyone looking to make their homes more energy efficient. One of these grants schemes is the feed-in tariff, a tariff paid to anyone who invests in a renewable energy system that generates electricity. For the most part this means solar PV but it is also available for other technologies such as wind power.

The government launched this scheme in 2010 and has to date proved to be very popular. So how do you qualify for these solar panel grants and exactly how does it work? The first thing to look at is the grants themselves and how they work. They are known as the feed-in tariff or FIT for short, they pay homeowners who invest in technologies such as solar a tariff payment for the electricity that is produced by the panels. Payments are made for every kilowatt of electricity your system produces.

The FIT scheme lasts for 25 years and will continue to pay the householder for that period as long as their panels are still generating electricity. The current rate that is being paid is set at 21 pence per kilowatt, the rate at which you are allocated depends on the year that you join the scheme. After your first year the tariff rate increases in line with the price index and this will increase year on year for the life of the scheme.

How to qualify

As you may have already worked out the grants are only paid out to those people who have invested in their own solar photovoltaic system. The reason the government have decided not to give grants up front to help towards the cost of a system is to discourage people from installing this technology inappropriately. As the FIT payments are based on what your panels produce this encourages people to install the most efficient system in the most appropriate location.

To be able to claim the tariff payments you would need to buy your own solar photovoltaic system and have it installed by an MCS accredited installer. This means that the system can be registered with your energy supplier to enable the payments to be made to you. Not everyone can afford the initial investment of £4,000 - £10,000 but you can get free solar panels but it will mean you will not benefit from the FIT payments.

What are the benefits of the FIT scheme?

The scheme was originally intended to encourage homeowners to install solar by making sure that the solar panel grants always offered about an 8% return. This is done by making sure that the tariff payments are in-line with the current costs of investing in a solar PV system. In monetary terms this means that the current 21 pence rate (2011/2012) would earn someone with a 4kWp system about £550 in their first year in grant payments.

Besides the solar panel grants you also save money on your electricity bills and are paid for any excess power that you generate and sell back to the grid. These are separate from the FIT grant payments but are counted towards your total return under the government calculations. The amount that you save on your bills and the amount that you export or sell back to the grid will depend on the size of the solar system you have and how you manage your electricity usage. In the UK typical savings on energy bills averages at 37%, it is possible to save more if you plan the times you use energy hungry appliances at home.

Grant criteria

In order to qualify for the government feed-in tariffs you need to own your solar PV system. It needs to be installed and registered under the Microgeneration Certification Scheme (MCS), this should be done by your installer. Once you have your certification this can be presented to your energy company who will then start paying the grants to you on behalf of the government scheme. The payments are guaranteed for a total of 25 years and the year that you join the scheme will determine the rate at which you are paid.