Welcome again fellow renewable energy aficionados!
Following my post the other day on the performance of our Solar PV Panels over the last year there were a few questions and comments which highlighted the fact that there is still a lot of confusion out there about how they work and how the government schemes work that support them. I hereby present you with a solar panel FAQ:
government solar panel payment schemes FAQ
This section contains answers about the FIT (Feed in Tariff) and export tariff government payment schemes for solar PV panels.
- What is the FIT? – This is a payment you will receive on every single kWh of energy your solar panels produce. The payments, which are measured in pence per kilowatt hour (p/kWh), have been reducing steadily over the years (to reflect that solar panel cost has been dropping dramatically and so less subsidisation is needed to make it work as an investment) and now sit at 12.92p/kWh
- Are the solar pv panel FIT payments protected from inflation? Yes, they are index linked. As an example my 2 year old installation attracts a current payment of 16.11p/kWh whereas a brand new installation would only receive 12.92p/kWh, but then that would rise over time to keep up with energy price inflation.
- How do you apply to the FIT? – I’m not going to say it’s easy as there is a fair amount of paper work involved, but it’s certainly worth it of course! To find out more information on how to apply check out the Ofgem article here.
- Are there any other hoops to jump through? – To make it worth your while you need to get your house up to scratch in terms of energy efficiency. You need to be band D or above to get the higher FIT payment rate, which could involve adding cavity wall insulation, energy efficient CFL and LED lightbulbs, and other measures.
- How do you receive payments? – You send a meter reading via a website every 3 months and the payment is paid via BACS into your bank account. Easy!
- Are the FIT payments guaranteed? Yes, the payments are guaranteed for 20 years.
- Do I pay tax on any of these earnings? – No. All payments from both the FIT and Export tariff are tax free.
- When is the FIT generation tariff due to be cut? January 2016, and they will be cut to a paltry 1.63p/kWh which is an 87% cut. You can get in there quick and get solar panels up before the end of the year to take advantage and you can also help campaign for a reverse or at the least a moderation of the cuts.
- Will it be worth installing solar panels after the FIT cuts take place? – According to most reports such as this one here, the answer is NO! In my own analysis here I also found that it will not be worth it unless the price of installations drops dramatically. Despite various campaigns such as this one here (please take a few minutes to fill it out if you have time by the way!) going around contest the cuts, you’d have to feel they are still overwhelmingly likely to happen, and in this case I do feel that Solar installation prices may end up crashing to make them viable again. However that is just my opinion and so if you have the money now then why look a gift horse in the mouth, act quickly and get them installed before the cut off date!
- So that’s the FIT, what is the Export Tariff then!? – The export Tariff is an additional payment you get (also index linked) for every kWh hour you actually export back to the grid. This currently sits at 4.85p/kWh.
- What is a deemed payment? – A deemed payment is what you are likely to get as your export payment. This is because smart solar meters that track exactly how much you have exported to the grid are expensive, so rather than install every solar house with one of those, you just get paid for 50% of the energy you generate. In other words it is assumed (“deemed”) that you export 50% of the energy your panels generate back to the grid and get a payment based on that. This is probably about right in most cases, and unless you have a massive solar install and small electricity demands, is probably not worth moaning about 🙂
solar panels installation FAQ
This section contains answers about the solar panels themselves, installation, maintenance, and where it is appropriate to fit them.
- How much do solar panels cost? – The average installation is now between £5K-£8K and still dropping fast, which is down from around £10K just a few years ago!
- How much money will the solar panels generate for me? – This obviously depends on many factors, most of which are mentioned in the point above. It is also worth noting that, in general, the further south you live the more you will generate. To get a rough idea of the amount of money you can generate from your solar panels check out this website here (although beware, I think the money they reckon you will generate seem overly generous compared to the actual figure I generated last year)
- What is the ROI of a Solar Panel installation? – Well I calculated what my panels generated last year, then applied that to the current FIT payments and a quote for a new install and it came out at an ROI of 9.51%. That is pretty good if you ask me! To see the whole calculation and check my maths, please see the full post here.
- I’ve heard about free solar panel schemes, why wouldn’t I just opt in for some of those? – For a start, there aren’t as many around nowadays, this is because FIT payments have been slowly cut over the last few years which is making it less viable for the companies providing these schemes to profit from them. Anyway… the difference between the free panel schemes and the ones you pay for yourself is that you don’t own the free panels (obvious when you think about it!). The deal here is that you will get reduced energy bills, so saving on average £120/year. The downside is that the FIT and Export Tariff payments all go to the company who installed them for you. I’ve also heard first hand that if you need to repair your roof, you have to foot the bill to have the panels removed and replaced, although I don’t know if that is common practice (all maintenance for the panels themselves should be covered by the installer though!)
- Is it worth me fitting solar panels? – To make it pay you need to have a south facing roof at the right pitch (angle) so that the maximum sunlight is caught and turned into electricity. You ideally need to have no tree or other large shadows covering the panelled area at any time (although it can still work with moderate cover)
solar panels usage FAQ
This section contains answers about once you’ve installed your panels, how to get the best out of them.
- When should I use electricity to maximise the savings for my solar panels? – Seeing as electricity costs around 15p/kWh and the export tariff is only currently 4.85p/kWh it makes sense to actually use the electricity your panels generate rather than export it back to the grid. So try to run all your appliances during the day in daylight hours if possible!
- OK, any specific tips on that then? – For example at the weekends you could do a big batch of cooking (assuming you have electric over/hobs) during the day to freeze for quick and easy dinners during the week. If you are at work during the week you could use the timer function on your washing machine to come on during the day so it’s ready to hang out at night. Put the dishwasher on in the morning before you go to work (or make use of a timer function). Back to cooking, you could make use of a slow cooker and leave that bubbling away for most of the day while you are at work, again a timer function here would probably help. Basically anything with a timer function on it that doesn’t need to be used at a specific time can be employed to maximise your daylight energy consumption! Also be careful not to run too many things at once because you can exceed the output the panels can actually generate and end up paying through the nose for it. Disaster! If in doubt, try to stagger things so you only ever have one large appliance on at the same time.
- How can I keep an eye on how efficient my solar panels are? – Zoe at EcoThriftyLiving has a few great posts on how you can use gadgets and sign up to the Sheffield Solar Farm scheme that can track your panels efficiency. Check it out!
- Who insures my solar panels? – The buildings insurance should cover this on pretty much all policies, but it is worth checking if you are not sure. The key point would be check the building sum insured figure is enough to cover rebuilding your house AND replacing the panels. (Source)
- What about maintenance? – The panels usually come with a very long warranty, which should be around 20 years. Check what is offered with your quote! The only thing you may have to fork out for is a new inverter which are about £800 which tend to give out between 10 and 20 years of service. There should be none to very little other maintenance costs from what I’ve read
- How long will they last? The FIT tariff pays out for 20 years but your panels may continue soldiering on far longer after that! According to this article, the majority of manufacturers offer a 25 year warranty saying output will still be 80% of what it started at. So you should still be getting cheaper electricity bills and pulling in a bit of extra money via exporting energy to the grid even in 25 years time! Bonus!
Hopefully that should answer most peoples questions! If not please leave any more in the comments and I will update the post with answers… Thanks!
I think one other thing worth mentioning is that if you can’t afford or don’t have a viable roof for solar there are plenty of crowd funding projects going on out there. A few links to get your started on that 1:
I’m sure there are loads more out there, if you have any experience with crowd funding renewable energy projects let us know about it below!
- I have no affiliation or skin in the game in any of these by the way so do not take this as a recommendation, DYOR etc…!!! ↩