Darling added to this in last Wednesday's pre-budget report, announcing that these feed-in tariffs, worth an average £900 a year, would become free of income tax.
The Treasury claims this will save households paying basic-rate tax of £180 in 2010 but this is nonetheless small beer compared with the cost of installing a solar panel, which can be as much as £10,000, according to Sharp Solar, the UK's largest solar panel manufacturer.
It said that the pay-back time for solar panels the time it takes to recoup an initial investment of £10,000 would shrink from 14 years to 10 as a result of the measures.
Who qualifies for Feed-in Tariffs?
Homeowners who have a PV electric solar panels fitted on or after July 2009 and have a 4kWp or smaller system will qualify for the feed in tariff scheme.
Ofgem will administer the scheme and electricity suppliers will be responsible for paying the reward to their customers.
How much will I earn?
Retro fitted photovoltaic (PV solar panels) systems of up to 4kW for existing homes will earn the highest initial payments, 41.3p per unit (although this declines over time). Lower rates, up to 36.1p, apply to new-builds and larger setups. A typical 2.5kW well sited solar PV installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.
The money that you receive will be dependant on the size of system you have fitted but the government estimate you will receive between 7 – 10 % return on your investment.
Why are the Government doing this?
The UK government have been set targets to meet and have made commitments to reduce carbon emissions and secure future energy supplies. The most effective way of doing this is to make small scale renewable energy an attractive proposition for householders. By giving a generous return on investment it is hoped this will initiate a speedy take up of solar electric. The initial Feed in Tariff rate of 41.3 pence will be available for a limited period in order to incentivise homeowners to enter the scheme sooner rather than later.
Will the amount you earn change?
The Feed in Tariff Scheme will be indexed linked, which means the rate will rise in line with inflation so the tariff you receive will not be devalued over time.
Government Guarantee
The UK Government will guarantee your Feed in Tariff scheme for 25 years. This leaves plenty of time for you to realise the return on your investment. This also highlights the necessity to act quickly as the higher rate tariff will make payback significantly quicker over 25 years. This guarantee of long term income also adds weight to the belief that investing in solar power may add value to and improve the saleability of your property.
Where’s the catch
The Feed in Tariff scheme has to be paid for some how.
The answer is that the government are not directly funding this scheme but will be raising funds through a general increase in electricity prices to the standard consumer. This works in a similar way to the current climate change levy which is added to our bills at the moment. The scheme has been devised to prompt individuals to act quickly and install renewable solar energy whilst it makes financial sense.
The Renewable Heat Incentive
Get paid to produce your own heat for your home for the next 25 years.
The Renewable Heat Incentive (RHI) is a government backed scheme which is planned to be introduced in the UK in April 2011. Although these details are still to be finalised, at the time of writing. This new scheme is designed to encourage people to generate heat from renewable source such as solar panels and heat pumps, by offering financial support. Not only will you be paid for the heat you generate, but you will also reduce your overall household energy bills, thus protecting yourself from future energy price rises and reducing your carbon emissions.
The scheme is open to everyone in England, Scotland and Wales for homeowners, tenants, businesses and Schools. You will be able to claim the tariff from April 2011. Anyone who has installed a solar heating panel system after July 15th 2009 will be able to claim the Renewable Heat Incentive when it begins next year.
Under the RHI scheme, you will be paid upto 18p/Kwh for the heat you generate with your MCS installed solar panels, whether you use it or not. This scheme is proposed to be degenerative, so taking advantage sooner rather than later will give the best rewards to pioneering users.
Only 1% of heat generated in the United Kingdom comes from renewable sources, the rest is generated from expensive fossil fuels such as coal, oil, electricity and gas, so the government has targets of 15% to meet by 2020 to reduce our national dependence on carbon intensive fuels. Taking advantage of the Renewable Heat Incentive will help our country meet these ambitious targets as well as saving you money long term on energy bills and doing your bit for the environment.
Who qualifies for Feed-in Tariffs?
Homeowners who have a solar heating panels fitted on or after 15th July 2009 and have up to 20 kW or smaller system will qualify for the Renewable Heat Incentive scheme.
Ofgem will administer the scheme and electricity suppliers will be responsible for paying the reward to their customers.
Government Guarantee
The UK Government will guarantee your Feed in Tariff scheme for 20 years. This leaves plenty of time for you to realise the return on your investment. This guarantee of long term income also adds weight to the belief that investing in solar power may add value to and improve the saleability of your property.
Where’s the catch
The Renewable Heat Incentive Scheme has to be paid for some how.
The answer is that the government are not directly funding this scheme but will be raising funds through a general increase in electricity prices to the standard consumer and European funding. This scheme is part of the investment our government has to spend to meet climate change obligations.
The scheme has been devised to prompt individuals to act quickly and install renewable solar energy whilst it makes financial sense.
Solar panels grants news archive
2001 - 2009
There are no solar grants available for businesses but they can claim the Enhanced Capital Allowances (ECAs) which enable them to claim 100% first-year capital allowances on their solar panel expenditure.
Solar grants & not for profit organisations
There is a DTI solar grant of 30% available for non-profit organisations under the Low Carbon Building Programme (Phase 2). This encompasses public sector buildings (including schools, hospitals, housing associations and local authorities) and charitable bodies.
Other solar incentives
- you can receive Renewable Obligation Certificates (ROCs) or other green energy certificates - which entitle you to money for generating energy
- you may be able to claim other grants and should contact your council or Regional Development Agency
- you can also sell any surplus electricity you generate back to the national grid. Contactyour electricity supplier for more information.
- some banks and other organisations are offering green loans' to help with installation costs
The latest UK solar panels grants news
Money spent on the next generation of nuclear stations
Gordon Brown confirms that the UK government will soon embrace a new generation of nuclear power stations. Mr Brown believes that renewing Britain's civil nuclear power programme is the most effective way of guaranteeing security of supply while tackling climate change, thus increasing solar grants, is very unlikely to occur.
Heat my Home believe that a mix of renewables for ruducing individuals households and thus the nations energy consumption is needed fast. No mention of reducing our energy consumption is ever mentioned, in the same sentence, when our politicians talk about climate change issues.
"My children will one day ask, what we did to address global warming
I want to be able to say I did something"
Mrs Bouvier, Lancashire
The DTI's response to our solar grant campaign
The 2003 Energy White Paper put global warming at the heart of the Governments energy policy. We are looking to significantly expand the proportion of energy produced from renewable sources. Renewable energy is an integral part of our longer term aim of reducing emissions by 60% by 2050 to mitigate the impact of climate change by reducing our reliance on greenhouse gas emitting fossil fuels.
The Government intends to spend over £500 million between 2002 and 2008 to help develop emerging technologies, with a focus on Rand D and capital grants funding. This sum includes, among other things, grants of £117 million for offshore wind, over £60 million for energy crops and biomass, £31 million for Photovoltaic's and £12 million for domestic schemes and £80 million on a new Low Carbon Buildings programme.
The Government is keen to exploit the potential of solar PV and solar thermal water heating systems, making them become reasonably practical and economic for most cases. We are also monitoring developments and encouraging industry and consumer take up with grants schemes and changing the building regulations to enable the benefits of low carbon and zero carbon technologies to be more readily taken into account.
I mentioned above the £31 million spent on PV Photovoltaic's solar; This was the four year Major Photovoltaic's Demonstration Programme under which homeowners and businesses claimed a contribution towards the installation costs of PV panels. It aimed to raise awareness and to encourages homeowners and others to take an active part in the climate change agenda and while reaping the benefits of renewable energy. Building on its success, we launched a new Low Carbon Building Programme at the beginning of April. The programme had a £30 million budget over 3 years, but this was increased to £80 million in March 2006's budget statement.
The Carbon Buildings programme was designed following a review of the UK's potential renewable energy resources which recommended that we continue to support for the installation of photovoltaic's and other small scale renewable's through a low carbon building approach. It is design to encourage homeowners, businesses, architects and developers to adopt an holistic approach to energy consumption in buildings and will focus on energy efficiency measures as well as renewable technology installations. This approach marks a significant change to current grant programmes.
I hope this letter helps to reassure you that the Government takes this matter very seriously, and has put in place a range of measures to ensure that the UK becomes a low carbon economy.
Malcolm Wicks MP
Minister of Energy (DTI)Why solar grants
The Government's Solar Photovoltaic's (PV) Major Demonstration Programme - which is administered on behalf of the Department of Trade and Industry (DTI) by the Energy Saving Trust - is to officially end in March 2006, with the final round of funding for stream 2 (commercial) grants in February 2006.
As demand for grants has been so high, the DTI has announced a further £750,000 to support the programme through to completion. The scheme provides funding of between 40 and 50 per cent for the installation of solar electricity panels for both domestic (stream 1) and commercial (stream 2) applications. The aim of the programme has been to kick start the UK market for solar PV, by demonstrating the long-term potential of the technology and thereby encourage the use o more environmentally friendly and sustainable methods of generating electricity.
Since 2002, the programme has provided £26 million of funding for 1,200 domestic and 180 commercial solar installations. As a result, it is estimated that 20,000 tonnes of carbon will be saved over the lifetime of the installations, thereby making an important contribution towards reaching the UK's climate change targets as well as the Government's target of 10 percen of energy generated to be from renewable sources by 2010.
Latest UK Solar Grants News Grants to help climate-conscious householders to install microgeneration technologies will be up for grabs again later this month, Alistair Darling announced today.
The Low Carbon Buildings Programme (LCBP) has already allocated £6.8m in grants to householders and, following the addition an extra £6m in the Budget, applications for the remaining £11.9m will be open from 29 May.
Since it launched in April 2006 the LCBP has directly funded 2175 installations on homes. This includes 242 mini-turbines, 313 Solar PV projects and 1467 solar thermal heating systems.
Mr Darling said:
“Micro-wind turbines and solar panels are fast becoming the credible response of householders to cutting their carbon emissions as well as their utility bills.
“The microgeneration industry has tremendous potential in the low carbon economy. Products are already available on the high street and are starting to become recognisable on our skylines. This grant scheme is designed to maximise carbon savings, demonstrate potential and help the sector become more commercially competitive in the long term.
“It is part of a wider government programme worth £86m that will also award grants for larger scale installations on schools and other public buildings.”
The grant scheme was put on hold in March while the application process was treamlined to make sure it benefits the sector in the long term.
Key changes to the application criteria include the removal of the monthly cap and a new requirement to have planning permission before applying.
The Government is currently consulting on removing the need for planning permission for the majority of microgeneration installations but it must be in place for LCBP grant applicants in the meantime.
The changes are designed to overcome delays in the take-up of grants. Only half of the £6.8m already allocated by March had been spent because of supply chain issues, planning consents not in place, delays in building schedules and applicants not ready to proceed. The DTI will continue to monitor these areas.
Grants for solar water heating systems
The Clear Skies (Low Carbon Building Programme) gives homeowners in England and Wales the opportunity to obtain a £400 grant toward a cost of a solar water heating system (including systems to heat swimming pools). In Scotland (www.est.org.uk/schri/)the grant rate is 30% of the system price.
Local authorities, housing associations, charities and “not for profit” organisations can apply for grants of 50% of solar water heating project costs under the Clear Skies programme.
Household Grant Offered
£400 regardless of system size
PV solar panels grants The Department of Trade and Industry has established a £20 million PV (Electric generating Solar Panels) grants programme which is managed by the Energy Saving Trust.
Household Grant offered
£2,500, per each household maximum
Solar Grants Applications Requirements
1. No faxed, photocopied or emailed applications will be accepted - and original signatures only.
2. Funds are limited and all funding is therefore allocated on a first come first served basis.
3. Incomplete applications will not be processed and there will be no opportunity to resubmit applications after the deadline.
4. Applicants must confirm that the installation will be completed within the six months of receiving a grant offer. Grant offers are time limited and applications that schedule work beyond the six month life time of a grant offer can not be approved.
5. Please be aware we expect to receive a higher than average volume of applications and the processing of these will cause delays to approvals. It is therefore very important to note that grants are not paid retrospectively. If work is started prior to receipt of a formal grant offer letter, the grant offer is invalidated and no grant monies will be paid.
6. All work must be completed by an accredited installer. No installer can undertake any work prior to receiving written confirmation of their accredited status. Any installations completed by non-accredited installers will not be eligible for a grant.
7. Installers and applicants are requested to not telephone to check if applications have been received / processed / offered as this will simply cause more delays to the processing of the applications.
For people who want a pure green electricity supply, this is probably the closest they will get to it.
