Making it easy to be green
Not only have falling purchase and installation costs made solar more affordable, but current government incentives mean that renewable solar energy systems have never been more financially attractive than they are right now. Here’s all you need to know about the financial incentives available to help you go green with solar.
The Feed-in Tariff (FiT) was a government incentive which guaranteed owners of PV panels money for the excess energy they produced. The FiT was a scheme available to anyone who had installed up to 5MW of solar PV amongst other renewable energy sources. FiT support is available for 20 years. Please note that the government closed the FiT to new applicants on the 1st of April 2019. Those who installed panels with an MCS certificate dated on or before 31 March 2019 will still receive FiT payments with a 20-year guarantee and adjustments for inflation.
Going forward, the government has introduced the Smart Export Guarantee (SEG) system. The SEG requires medium-large energy suppliers to offer a payment to solar PV households who export power to the grid. Due to the exported energy requiring accurate metering, households must have Smart Meters installed to be eligible, hence, ‘Smart Export Guarantee’.
There may also be an element of ‘smartness’ with the tariffs such as the Octopus’s Agile tariff which uses varying prices to encourage individuals to shift their electricity uses away from peak times. The price you are paid will not fall below zero at any point.
We highly recommend checking out the Solar Trade Association’s SEG League Table to see which suppliers are offering the best price for your surplus power.
Did you know that on certain smart-energy tariffs you can get paid for using electricity? During times of surplus electricity generation, you can get paid to take the load off the grid.
When energy suppliers have excess energy and you’re signed up to a smart-energy tariff such as that made available by Octopus Energy you can get paid to use electricity. This can then used to operate appliances, charge electric vehicles (EVs) and home batteries. This is called negative pricing.
While historically these big drops were restricted to overnight, with ever-increasing amounts of renewable energy from solar and wind generation, such events are becoming more frequent throughout the day.
The Domestic Renewable Heat Incentive (Domestic RHI) is a government financial incentive to promote the use of renewable heat, such as solar thermal. The domestic RHI launched on 9 April 2014 and provides financial support to the owner of the renewable heating system for seven years. The scheme covers England, Wales and Scotland.
If you generate heat for your home via a renewable source, you may be eligible to apply. You’ll receive RHI cash payments quarterly over seven years. The amount you receive will depend on a number of factors – including the technology you install, the latest tariffs available for each technology and – in some cases – metering.
For this incentive, the current Solar Thermal rate (as of April 2020) is 21.36p / kWh. The scheme will remain open to applications until 31 March 2022 and you can apply via Ofgem’s website.
Even on days when your system is not generating excess energy, you will be minimising the amount you need to purchase from the grid and your reliance on expensive energy bills. This varies based on your system size and household energy usage habits. The table taken from Energy Saving Trust data illustrates the potential savings on bills based on current market energy costs with SEG payments applied.
|Location||Savings on bills (£/year) last updated July 2020|
|Home all day||Home in the mornings||Home in the afternoons||Out all day until 4pm||Out all day until 6pm|
|London, South England||£390||£360||£345||£310||£300|
|Manchester, North England||£330||£285||£270||£215||£195|