Feed-in Tariff payments for solar panels—everything you need to know

Solar PV on tiled roof

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Note: This guide concerns solar photovoltaic (PV) systems—solar panels fitted to your roof that use sunlight to produce electricity—and the Feed-in Tariff (FIT) scheme. The FIT does not cover solar thermal systems, which are used to heat domestic hot water. Instead, these are supported through the Domestic Renewable Heat Initiative (RHI) programme.

What is the Feed-in Tariff?

It’s a government scheme that pays people to adopt environmentally friendly renewable technology (such as solar panels) to generate electricity for their homes or premises.

As the scheme is due to close at the end of March 2019 and not return until 2025 at the earliest, it’s really worth getting your solar panels sooner rather than later!

How does it work?

  1. You have your solar panels installed, then apply to the FIT scheme.
  2. Once your application is accepted, your energy supplier—known as a FIT licensee—pays you for the electricity you generate.
    By law, the UK’s major energy suppliers must pay you for using solar panels in this way. Smaller energy companies can opt out of the FIT, but many choose to take part anyway. A full list of current FIT licensees is set out here.

How do I benefit?

You benefit in three ways:

Generation tariff

Export tariff

Savings on your energy bills

You receive a payment every three months for each unit of electricity you generate.

How much this is depends on your tariff rate.

You can sell back to the grid any electricity you produce but don't use yourself.

The export tariff is set as an “estimated” amount. This is currently estimated as being 50% of the electricity you generate.

Using solar panels to produce your own electricity means you’ll also benefit from lower bills. Find out how much you could save each year.

You must submit meter readings to your energy supplier as normal.

Example

A property in Yorkshire with a 4kW solar PV system on a south-facing roof could receive £6,220* in income and savings over the 20-year lifespan of the FIT.

  • Generation tariff payment of £2,720
  • Export tariff payment of £1,800
  • Electricity bill savings of £1,700

*Calculated using the Energy Saving Trust’s solar energy calculator using the tariff period 1 July to 30 September 2018. Assuming there is no shading; the property has an EPC certificate of D or above; 50% of generated electricity is exported; RPI 2%; and the resident’s current electricity tariff is £0.14 per kW.

How much will I receive?

You’re assigned a tariff rate when your solar photovoltaic (PV) system is registered with the FIT. Ofgem’s website lists current and previous rates.

1 July 2018 to 30 September 2018

Description

Total installed capacity (kW)

Generation tariff (p/kWh)

Export tariff (p/kWh)

Standard solar PV receiving the higher rate

0–10

3.93

5.24

10–50

4.17

50–250

1.79

Standard solar PV receiving the middle rate

0–10

3.54

10–50

3.75

50–250

1.61

Standard solar PV receiving the lower rate

0–10

0.25

10–50

0.25

50–250

0.25

Standard large solar PV

250–1,000

1.43

1,000–5,000

0.25

Stand-alone solar PV

0–5,000

0.12

Tariff rates

This depends on a number of factors, including the following:

1. Date you became eligible for the scheme

Whatever the tariff rate is when you join the FIT, that’s the rate you’ll get for the full 20-year period of the scheme.

The Government revises FIT rates every three-month tariff period in line with the Retail Price Index. However, once your system is registered, your rate doesn’t change for 20 years.

2. Capacity

The size of your solar PV system is measured in kilowatts (kW)—most residential systems are between 1kW and 4kW. When you apply for the FIT, you’ll need to provide two figures:

  • The total installed capacity (TIC)—the maximum capacity at which your system can operate for a sustained period without being damaged
  • The declared net capacity (DNC)—the TIC less the amount of electricity your system needs to run (i.e. the capacity of the inverter)

3. Energy efficiency requirement

Energy performance certificates (EPCs) rate buildings on their energy efficiency and set a minimum requirement—an energy efficiency requirement (EER)—that the property must meet. Read more about EPCs here.

For the purposes of the FIT, solar PV systems are given a higher, middle or lower rate. This is based on whether:

  • the EER for the property has been met

the owner is operating multiple systems at once

Higher-rate EER

Middle-rate EER

Lower-rate EER

The building has an EPC rating of D or above

The building has an EPC rating of D or above

The building has an EPC rating of D or above

The EPC has been issued within the last 10 years and before the date the installation was commissioned

The EPC has been issued within the last 10 years and before the date the installation was commissioned

The EPC was not issued before the date the installation was commissioned

The owner does not have 25 or more installations

The owner has 25 or more installations

If your property is rated below band D, you can still get FIT payments—you’ll just be assigned a lower tariff rate.

Not all buildings need to meet the EER. If yours is exempt, the EPC assessor will let you know in writing. You’ll need to pass this letter to your energy supplier.

Deployment caps

A deployment cap is a limit on the total number of systems—measured by capacity—that can be installed in the UK in a given tariff period. The tariff periods are as follows:

Tariff period 1

1 January–31 March

Tariff period 2

1 April–30 June

Tariff period 3

1 July–30 September

Tariff period 4

1 October–31 December

If the maximum capacity is reached during a tariff period, the scheme will delay registering any new installations until the next period, and the tariffs in tariff periods that follow will be reduced by 10%.

Ofgem publishes a weekly deployment update on its website that shows the status of all caps within the current tariff period.

How long do the payments continue for?

FIT payments last for up to 20 years.

Do I pay tax on Feed-in Tariff payments?

No.

If your solar panels are installed on business premises and your company is VAT-registered, you will receive a VAT payment as part of your export tariff payment. You’ll need to declare this to HMRC when you file your tax returns.

How do I apply to the scheme?

It all depends on the size—or declared net capacity (DNC)—of your solar PV system.

Small installations

(e.g. a home or small business premises)

Large installations

(e.g. medium to large business premises)

DNC of 50kW or less

DNC of more than 50kW and a total installed capacity (TIC) up to and including 5MW

Apply to the Microgeneration Certification Scheme

Apply to Ofgem

Applying to the Microgeneration Certification Scheme (MCS)

Your solar PV system must be installed and commissioned by an MCS‑certified installer. The system itself should also be certified.

Once your system has been commissioned, the installer will register it with the MCS. You should receive an MCS certificate within 10 working days.

You then need to tell your energy supplier that you want to register for the FIT. This part of the process is explained further below.

What is the MCS?

MCS is a nationally recognised scheme set up to ensure that solar PV systems—and the companies that install them—meet strict European and international standards of quality and reliability.

Installers are accredited based on how they:

  • install—fix the solar panels to your building
  • set to work—ensure the panels function as a complete system
  • commission—check the installed system works safely and as it should

If an installer meets the MCS’s requirements, they’ll receive a quality mark they can present as a guarantee of their workmanship.

YES Energy Solutions is an MCS-certified organisation and is committed to providing quality solar PV installations.

Applying to Ofgem (ROO-FIT accreditation)

For large installations (systems over 50kW), you’ll need to create an account on the Renewables and CHP Register, Ofgem’s online system for managing all its different renewable energy schemes.

You can apply for:

  • full accreditation—if your solar PV system has already been commissioned, or has preliminary accreditation and is due to be commissioned in the next two months
  • preliminary accreditation—if your solar PV system is yet to be commissioned

Getting preliminary accreditation is worthwhile as it gives you both a guaranteed tariff and the peace of mind that your system will be accepted for the FIT scheme.

Answer all the questions in the application, making sure everything is correct. You’ll also need to agree all the declarations and provide the following evidence:

  • Your G59 certificate—this shows that your system has been tested and connected to the electricity grid. It must give the date the testing was done.
  • A signed declaration from your installer confirming the date your system was commissioned
  • A signed statement from your installer confirming your system’s total installed capacity (TIC)

Depending on how complicated it is, your application will go through a two- or three-stage process. Ofgem might contact you for more information or ask you to clarify details you’ve provided.

How do I register with my energy supplier?

Once you’ve applied to the MCS, you then need to register your solar panel system with your energy supplier. Providing they are an FIT licensee, they’ll ask you to:

  • fill in and return an application form
  • send your MCS certificate
  • provide your EPC

Your energy supplier will:

  • confirm that you’re eligible for the FIT scheme and from what date
  • add you to Ofgem’s register of installations that receive the FIT (if a deployment cap is in force, you might be placed in a queue according to the date and time your MCS certificate was issued)
  • tell you when your payments will begin

The major energy suppliers

Registering with British Gas

  1. Download, print and fill in the application form.
  2. Scan it and send it to British Gas, either by:
    1. e-mail to service@contactus.britishgas.co.uk (with all the necessary documents scanned and attached)
    2. post to: Feed-in Tariff
      Winnall Down
      Alresford Road
      Winchester
      Hampshire
      SO21 1FP

Registering with EDF Energy

  1. Download, print and fill in the application form.
  2. Send it to EDF, either by:
    1. e-mail to feedintariffs@edfenergy.com (with all the necessary documents scanned and attached)
    2. post to: The Green Hub team
      Gadeon House
      Grenadier Road
      Exeter
      EX1 3UT

Registering with E.ON

  1. Download, print and fill in the application form.
  2. Send it to E.ON, either by:
    1. e-mail to FiTapplications@eonenergy.com (with all the necessary documents scanned and attached)
    2. post to: FiT Application Team
      E.ON Energy
      Caxton Road
      Bedford
      Bedfordshire
      MK41 0EW

Registering with npower

  1. Download, print and fill in the application form.
  2. Send it to npower, either by:
    1. e-mail to microgeneration@npower.com (with all the necessary documents scanned and attached)
    2. post to: FIT Admin Team
      npower
      Oak House
      Bridgwater Road
      Worcester
      WR4 9FP

Registering with Scottish Power

Fill in the online application form.

Registering with SSE

  1. Download, print and fill in the application form.
  2. Post it to SSE at: FIT Bureau
    SSE
    Ty Meridian
    Malthouse Avenue
    Cardiff
    CF23 8AU

Do I have to supply meter readings?

You’ll need to provide a meter reading each month. Most energy suppliers have a page on their website where you can submit the readings online.

Can I switch energy suppliers if I’m getting Feed-in Tariff payments?

Yes. And you don’t have to use the same energy supplier for your FIT payments as the one that provides the electricity for your house or premises.

However, bear in mind that the energy company doesn’t set the FIT rates—Ofgem does that. So it isn’t like your residential electricity where you can shop around for the best deal.

If you do decide to switch, first make sure the supplier you’ve chosen:

What happens if I move house?

In most cases, the outgoing residents leave the solar panel system on the roof when they move. As FIT payments are made to the owner of the property, moving house means the payments transfer to the new owners.

Technically, you could remove the solar panels and fit them to your new property, but this would have to be treated as a new installation, as all of the factors specific to your old property—the size of your roof and the direction in which it faces, for example—will no longer apply.

In any case, you must always let your energy supplier know that you’re moving house, so they can arrange for the new owners to take over.

Can I sell my Feed-in Tariff?

Yes. There are now companies who will offer to buy back your FIT registration in exchange for a cash lump sum. However, as doing this can make selling your property more difficult, it’s advised you look into all the legal and contractual issues before you go ahead and sell.

How does battery storage affect my Feed-in Tariff payments?

Using a battery means you can store all the electricity your solar panels generate, rather than exporting it to the National Grid. Whether this affects your FIT payments depends on whether your solar panel system is AC-coupled or DC-coupled.

The difference between the two types of storage is explained here.

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