You already know that going solar is a great way to save money on electricity bills. But did you know it’s possible to make money from your panels?
That’s right – you can be paid for the free sunshine hitting your roof.
Under the feed-in tariff (or FiT) incentive, your electricity provider is obliged to pay you for the clean electricity your panels produce. At the time of this writing:
- The Generation portion of the tariff pays you 4.25p for every kilowatt-hour of solar power you use within your home
- The Export portion pays 4.91p per kilowatt-hour for any excess solar electricity you feed into the National Grid
And those payments increase each year in line with inflation and last for the next 20 years.
How the FiT incentive makes solar an unbeatable investment
Even without the feed-in tariff, going solar is an investment that pays for itself. Your electricity savings will eventually surpass the upfront cost of your system.
But, when you add in the FiT incentive, you start earning income from your solar investment. This speeds up the payback period substantially.
However, there’s a catch.
Like most government incentives, the feed-in tariff is regressive, meaning that the greatest benefits go to early adopters. Those who enrolled when the program first launched in 2010 received the highest pay-outs. In fact, many homeowners earned 41.3p per kWh, which is nearly 10 times what the feed-in tariff offers today. The program was so generous that some customers enjoyed solar payback periods of under 10 years.
Even as recently as 2014, former Minister of State for Energy and Climate Change, Greg Barker, went on record stating that,
“Anyone considering retiring should seriously consider whether solar panels are right for them, because in some circumstances, they will get a higher return than from putting the money into an annuity.”
So does it make sense to go solar and take advantage of the feed-in tariff?
Yes. And here’s why:
- Solar already delivers huge savings. The feed-in tariff simply allows you to earn free money on top of that. So, even if you join the program as a “late adopter,” you still come out ahead
- Currently, savings in banks and building societies, even in cash ISAs provide small returns. By contrast, solar delivers higher, predictable, guaranteed returns. The sun will never start charging you more. But if you’re still worried about retirement, you always have the option of investing your electricity bill savings and FiT earnings
- Your benefit rate is locked in whenever you join the feed-in tariff program. So even if this incentive goes through subsequent downgrades in the future, you remain guaranteed into whatever pay-out level you started with
- The program will most probably get scaled back in the future. Eventually, the feed-in tariff may disappear entirely. The sooner you act, the better
To learn more about solar power and the FiT program, contact our Energy Saving Team today.