The Feed-in Tariff (or FIT) is a Government backed scheme to encourage investments and accelerate growth in clean energy generation.
Your utility company pays you an agreed rate (the FIT) for 20 years for all the electricity that you generate. The rate guaranteed for a 20 year period and it also increases with inflation during that time.
Generation Once registered, you will be paid a guaranteed amount of money for every unit of power generated whether you use it yourself or export it to the grid. And you can register as soon as your solar PV system is installed, once you receive your MCS installation certificate from Smart Energy Systems.
If you don’t use all the power generated on your premises then an additional sum (currently 4.85 pence per kWh in March 2017 – the export payment) is paid for any electricity you export to the National Grid.
Savings on your electricity bills
In addition to the FIT payments and Export Payment, you will enjoy free and clean electricity and make big savings. Every unit of energy that your PV system generates can be used by you, saving on your electricity bill. This currently amounts to approximately an additional 13p per unit (depending on your current electricity price).
In most cases a private individual receiving FIT payments for a domestic solar PV system will not be liable for any income tax on their FIT income. However we recommend that you contact the HMRC for further guidance.
Businesses may be able to claim a Capital Allowance for plant and machinery, and this includes solar PV systems. This means a business can write down the asset each year by an agreed rate and currently PV can be written down by 20% each year.