Feed in tariff
The government's Feed-in Tariff (FIT) basically pays you in return for having solar panels on your roof. It guarantees cash payments for 20 years to households that generate their own electricity using solar.
how you save
- Generation tariff or FIT, is a fixed rate payment to households for the total amount of electricity generated, calculated per unit. The rate you'll receive is determined by when you first registered to join the FIT scheme and the type and size of installation.
- Export tariff is payable on the units of electricity you export back to the national grid because you haven't used them in your own property. In the case of most small-scale technologies - or unless you already have a two-way smart meter installed - the level of electricity exported is currently 'deemed' by assuming you export 50% of the electricity you generate.
- Savings on your electricity bills, because you'll be generating a portion of your household electricity yourself, your energy bills will be lower.
The tables below show an example of a 4kw system costing £5500, and shows a breakdown over the FIT payment period of 20 years. Table 1 is based on 50% assumed usage of electricity generated and has a projected internal rate of return of 5.57%. Table 2 is based on 80% assumed usage and its IIR is 8.9%.
The diagram below shows our assumptions when projecting returns.