How Can the Government Help You?
Promoting the use of renewable energy sources has been on the UK Government’s agenda for many years now. The EU’s Renewable Energy Directive set out for all member countries to reach a 20% renewables target before 2020. The UK has been working towards that goal, but recently approved policies have scrapped or reduced the related incentives.
This tendency was accompanied by a decrease in the cost of solar panels, so new buyers do not need to worry. Even though the Government does not technically hand out grants, it acts in other ways to make solar panels more accessible for everyone. Here are the main schemes in place today.
Solar VAT is Increasing from 5% to 20%
With the recent announcement of the VAT increase on solar panels in the UK from 1 October 2019, we urge you to invest now and avoid the extra costs.
To learn more about the recent change in regulation, read our blog post about the VAT increase on solar panels.
The Feed-In Tariff
Under the Feed in Tariff scheme, those who generate electricity via solar panels or wind turbines receive a certain amount of money for each unit (kilowatt per hour) they produce and for the extra electricity they sell back to the grid. Although this scheme ended in 2019, those who are registered will continue to benefit from it.
The specific amount received varies based on the size of the system, the type of technology and when it was installed. The payments last for a total of 20 years from the date of registration, significantly reducing the payback time of the initial investment.
You had to choose a certified installer, and you were then be able to choose between receiving the payments from your energy supplier or from a list of registered suppliers. The payments are divided into two types:
- The Generation Tariff is a set amount of all the energy produced and used that depends on the factors mentioned before. The tariff ranges between 6.38-13.88p per kWh/h depending on the size of the system;
- The Export Tariff relates to the electricity in excess that you sell, for which you will get 4.77p per unit. You will be able to sell half of the total energy you produce.
|Capacity (kWh)||Generation Tariff
|Lower Tariff (requirements not met)
What Is Replacing the Feed in Tariff?
Since the solar Feed in Tariff closed, a new incentive was launched called the Smart Export Guarantee (SEG).
The SEG enables small-scale low-carbon electricity generators to receive payments for the surplus energy they export back to the grid.
Although this is not a direct government grant, all licensed suppliers must now offer an export tariff to their customers – which are UK homeowners. Those suppliers with over 150,000 customers are obligated to offer a tariff, while those with fewer can partake on a voluntary basis.
All homeowners with a solar panel system with at least a 5MW capacity are eligible under the SEG. In addition, the house must be fitted with a smart meter, in order to measure the exports. Solar storage is also included in the new scheme.
Renewable Heat Incentive
If you are interested in heating your home using solar thermal panels, you could benefit from the RHI scheme. Initially introduced for the commercial sector, the scheme was extended to domestic use in 2014.
Its purpose is to encourage the switch from traditional to renewable heat technologies, such as solar thermal panels, biomass boilers, pellet stoves and more, to reduce the country’s carbon emissions. It provides a 7-year long support for owners of such systems through quarterly cash payments, the amount of which depends on the type of technology and the latest related tariffs.
The property must first obtain an Energy Performance Certificate (EPC) assessing its energy efficiency and how it could improve, which is required for the RHI application.
Free Solar Panel Scheme: What Was It?
Previously, if you could not afford to buy solar panels, you had the option of acquiring them for free from companies that would rent your roof space for up to 25 years. With this scheme, a company would offer to provide the solar panels, take care of solar panel installation and maintenance for free, and in return receive the Feed in Tariff (FIT) payments.
Instead, a scheme called 'solar buyback' has become another possibility, where companies offer homeowners a lump sum upfront, and in return collect the FIT payments the homeowner would have received. However, it is important to evaluate an offer like this in relation to the total FIT payments you would receive to determine whether or not this buyback scheme would be worth it.
How to Apply
In order to apply for the different incentive schemes you just need to visit the gov.uk website, where you will find all the information you need about the aids related to solar panels and the grants for other renewables such as heat pumps and boilers. The website also has a handy payment calculator for the RHI and a solar energy calculator if you want to install solar panels and benefit from the Smart Export Guarantee.
After collecting the information, if you decide to invest in solar power or other sources of clean energy, you can head back to Greenmatch to receive free, non-binding quotes for solar panels, heat pumps and boilers.