Getting your head around feed-in tariffs as an investment

“John and Mary, an ordinary couple from Lincolnshire who have recently invested in solar panels for their home explain in their own words why they took the plunge.”

Solar panels and tariffs

Solar panels and tariffs

“We have just had a 4kW photovoltaic panel system fitted to our east-facing roof, not just as an ethical investment but because it makes very considerable financial sense.

There is currently a window of opportunity to take advantage of a clean energy cash-back scheme, guaranteed by the government for a 20 year period, but if you defer your installation for a few years, your entry benefits will be less, so don’t wait to make the decision.

We are enthusiastic about reducing our carbon footprint but are attracted to the PV electricity feed-in tariff scheme, largely for financial reasons. It is not an inconsiderable outlay, and you cannot take your money back as you can from a bank, but a 7.9% per annual rate of return over 20 years, much reduced electricity bills, the annual cash back and a buffer against future energy cost increases seemed too good an opportunity to miss.”

Stuart Lovatt, the founder of Heat my Home adds, “One customer, with an old-fashioned revolver disc in his electricity meter, is said to spend hours watching it go backwards! Some people become very proud of and enthusiast about their solar panel installation, sometimes boring family and friends, but most people are just happy to be getting a better deal than from their bank and energy supplier.”

If you agree that this is a subject worth exploring further, please use this guide to solar to begin your solar journey.

Welcome to the solar panel century.

Why solar panels?

The office of National Statistics calculates a 78.2% rise in electricity prices by 2020.
photovoltaic panels collect energy from the sun, even on cloudy days. An inverter turns the electric current from DC to AC for your main distribution board and a smart meter record the energy that you use. Any surplus is exported out.

Installers must be MCS accredited (Micro Generation Certification Scheme).

There are three guaranteed stream of income:

The Electric Generation Tariff– Currently at 15.44p per kWh for all electricity generated, paid to you by your power supply company, even if you have used it.

The Electric Export Tariff– An additional 3p per kWh for any surplus-to-requirement electricity exported to the National Grid.

The Heating Tariff– If you install solar heating panels or tubes than a tariff of 8.5p per kWh is paid for a guaranteed 20 year period.

The PV installation and the rights to a feed-in tariff can be transferred, by contract, to a new owner (just tell your energy supplier) should you wish to sell your home afterwards.

Once a feed-in tariff has been allocated to you, it remains fixed, by law, and guaranteed for 20 years, or 20 years for solar heating panels.

The UK was the first country in the world to make carbon reduction targets legally binding through our Climate Change Act 2008.

The 2002 Renewable Obligation encourages large scale, renewable electricity generation, then the Energy Act 2008 authorised feed-in tariffs to encourage householders and others to invest in small scale, low carbon electricity generation by providing them with a clean energy cash back scheme.

Summer 2009 saw consultations with a large range of interested parties including the Regional Development Agencies, existing generators, technology manufacturers, trade associations, and academia.
The six biggest electricity suppliers are bound, by recent license amendments, to pay the feed-in tariffs to small scale generators for the power they generate.

The feed-in tariff scheme came into effect in April 2010 and is expected to be paid to over 750,000 small generators, to reduce carbon dioxide production by 7 million tonnes. This gives us peace of mind over an uncertain future energy supply and spiraling costs, by turning consumers into generators.

After choosing an MCS accredited/Real scheme accredited solar installers, a technical survey of your home’s roof orientation (the South is best, but either East or West is fine) will be done, with pitch, load-bearing and shadowing of panel arrangements, wiring and other equipment specifications taken into account. Estimates of costs and rates of return can then be discussed with you.


"Feel the pride."

Solar Stu on
Founder of Heat My Home.

  • Hi Bob

    The scheme is called the Renewable Heat Incentive Scheme which began this August.

    The scheme is still in Stage 1 test mode as they gather data about energy outputs for various heat related renewable technologies including solar panels, so you will have to agree to submit data.

    Stage 2 will be rolled out next year once that data has been calculated.

    You can find out more at:

    Hope this helps

  • bob gillingham

    re the 8.25pence per kw for solar heat. When is this available as I cant find anything on government websites.
    All so how is it measured? on installed values or meters if meters where can you get them as I have been unable to source anything simple or economic.