Eco Feed-in Tariff
FITs FAQs What return on investment should I expect? The scheme has been devised to
give a 5 to 8% return on investment for “well-sited installations”. Small solar installations are designed to give 4.5%. Of course, you will only achieve these levels of return if your system performs well. So check that you’ve got a good site before going ahead with an installation.
How do I calculate return on investment? Good question. There seem to be
a lot of different methodologies out there. The most common is to take the upfront capital cost, then add up the annual income (generation tariff + export tariff + savings on bills). Divide the latter by the former, and multiply by 100 to get the rate of return.
simplistic. Firstly you have to take into consideration ongoing costs. For example you are likely to have to replace the inverter at least once during the life of the tariff. The system may need servicing. There will be a cost of removing solar panels from the roof at the end of their useful life. It’s also difficult to predict energy prices going forward. The government’s methodology is rather more complex and involves annuitizing the capital expenditure. You can download it from the DECC website.
?
How do I maximise the return from the feed-in tariff? It makes sense to do things that
use electricity while your system is generating. So, with a domestic system you might do the vacuuming or run the washing machine during the day if you’ve got solar panels, or when the wind is blowing if you’ve got a turbine. Ideally, only run one energy-hungry appliance at a time.
Am I eligible for the feed-in tariff if I install my own system? No. To claim FiTs you must use an MCS accredited installer and install MCS accredited products.
What happens if I move house? The government expects standard
property ownership rights to apply to generating equipment. This means that when a house or lease is sold, the generating equipment and the FIT payment are sold too, and the FITs system administrator must be told of the sale. They expect that the market will decide how much a microgeneration installation will increase the price of a property.
What is the MCS? The Microgeneration Certification
Many people would say that is too
Scheme is an independent, industry- led, certification scheme for both installers and products. It is accredited by the United Kingdom Accreditation Service (UKAS) and is administered by Gemserv. To be eligible for the feed-in tariff you must use an MCS certified installer. Check on the MCS website to make sure their membership is up to date before going ahead.
consulting on whether to change this rule.
Will I have to pay tax on the income I
get from the feed-in tariff? Income for domestic properties
generating electricity mainly for their own use will not be taxable income for the purposes of income tax. However, businesses will be taxed on the income.
Are the payments inflation proof? Both the generation and the export
tariffs will rise annually in line with the retail price index (although the government is consulting on whether to change that to the consumer price index).
Will off-grid generators qualify for feed-in tariffs? Yes, you will receive the generation
tariff. To do so, you will have to declare that the electricity generated has been used, and must comply with the scheme requirements in relation to metering. You can approach any of the mandatory FIT suppliers (ie the big electricity companies) and they will be obliged to provide your feed-in tariff payments. Voluntary FIT suppliers (ie the smaller energy companies) may also agree to provide FiT payments to off-grid generators.
Cathy Debenham is founder of YouGen
(
http://www.yougen.co.uk). The website provides information for people
interested in installing renewable energy, and helps people to
choose a good local installer by encouraging companies in its directory to ask
for feedback from their customers.
36 Self Build Homes | April 2012
Is there any consumer protection body? All MCS accredited installers must
join the REAL Assurance Scheme and sign up to its Consumer Code. This protects you against mis-selling and dodgy sales techniques. Check that the company you are dealing with is a member here.
Can I claim the feed-in tariff if I install a refurbished or second-hand system? No. But the government is currently
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