Greensuite answers your questions about Photo Voltaic Panels.
–So who can benefit form the Feed In Tariff?
Renewable generation systems up to a capacity of five megawatts are eligible under the governments Feed In Tariffs scheme. That means any home, group of homes, school, collage, office or factory can benefit, as long as the system produces a maximum of five megawatts.
–So I generate my own power and whatever I don’t use I can receive payment for when I sell it back to the grid?
Well, it’s better than that! You are eligible to receive money per unit for all the power you generate, but you get slightly more per unit if you don’t use it and you import it back to the grid. The current level is 43.3 pence per Kw generated, with an extra 3 pence per Kw for any power you generate but don’t use and feed back into the grid. For example, the power suppliers assume you will use 50 % of what you generate. So, for the sake of easy maths (!) let’s say you generate 100Kw of electricity. You will receive £430.00 (43.3pence times 100) plus £15 (50% of 100kw times 3 pence).
–How do I know how much I am using and how much I am importing?
You have a choice. You can either have a Smart Meter fitted which will tell you the exact figures, or you can average claim 50% usage and 50% export. This means that if you think you will use less than 50%, because you receive more for what you feed in to the grid, its beneficial to have the Smart Meter. However, if you think you will use more, it’s beneficial to claim the 50% usage.
—I haven’t got a south facing roof; does this mean I can’t have PV?
No, it just means you won’t generate as much power, and it will take a little longer to receive back your initial investment. A quick site survey would tell us the facts and figures so you can decide if PV is the solution for you.
–I have seen PV Panels for sale in DIY stores; can’t I just get a roofer to fit them?
Yes; you can, but you won’t be eligible for the Feed In Tariff. To be eligible to claim you have to have your system thoroughly checked and signed off by a registered installer who has been accredited with MCS, which is the Microgeneration Certification Scheme, a rigorous national set of standards which makes sure everything is done safely and professionally.
–I don’t really understand how I can earn money from PV, how do you do the maths?
The income after project payback is calculated simply by combining the FIT income, electricity savings and the export income and multiplying by 25 ( the number of years the FIT is available for) to give a total and then subtracting the installed cost of the project from this total. This is a simplified model in reality the costs of imported electricity will increase realising greater savings and the FIT payments will increase inline with the RPI.
–Will my business see a drop in Climate Change Levy?
Yes there is the possibility of a reduction in climate change levy which is charged /MWh (1000kWh) of electricity used so a reduction in usage will result in lower charges. Plus you can register with Ofgem to receive Levy Exception Certificates which can be traded.
–What are the VAT implications?
VAT is only chargeable at 5% on domestic installations and the standard 20% rate applies to business installations. However, most businesses will be VAT registered, and therefore can reclaim the VAT amount. For a VAT registered business, VAT will be added to any export tariff amounts you receive, but not to the generation tariff. A business will generally pay tax (income or corporation tax) on the revenue generated, but can also set off the full value of the PV investment against tax. Any business will receive 100% relief, in the year of purchase, on any expenditure up to £100,000 of capital expenditure, under the Annual Investment Allowance (“AIA”) scheme.
—How long does it take to fit the panels?
Obviously that depends on the size of the system, but the average domestic installation takes only about three days.
—And then I start getting the FIT straight away?
Not quite. After the system is signed off by our electrician, the meter number is emailed to MCS, with whom we are registered. Within an hour or so (it’s usually even quicker) we receive a system registration certificate from them, which we forward to you. You will have applied for and received a form to fill in from your electricity provider. The form will ask you details which are on this certificate. You fill it in, send it off, and, depending on the efficiency of your provider, start earning as soon as they have processed your paperwork.
—Do I get paid the payments yearly?
No, At the moment the customer will receive their payment quarterly via cheque.