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Frequently Asked Questions

How much can I save altogether?
Savings and earnings from a Solar PV system are made up from
. Feed in Tariff payments paid to you for generating your own “green energy”.
. Selling your spare electricity to your energy supplier.
. Savings on your electricity bill as you will be using your own electricity.
Typically a domestic system will provide return of about 12% or £700 which for domestic customers is tax free.
A bigger system installed on business premises will typically provide a return of about 20% or £7,000.
Compare this to a cash ISA savings account paying only 21/2 % and you can see why Solar PV systems have become very popular.

How much does it cost?
Every installation is different so it is difficult to estimate the cost without a site visit. However a typical domestic system would cost about £5,500 and a large 30kWp system for business premises about £35,000.

What is the Feed in Tariff?
Quite simply this is the money paid to you for generating “green electricity” The Feed in Tariff is designed to pay you back the cost of installing a Solar PV system. Typically over 20 years the Feed in Tariff will pay you about double what it cost to install. Not only that but you will be paid for the electricity you sell back and you will make substantial savings on your electricity bill. The Feed in Tariff is paid to you by Licensed Electricity Suppliers approved by OFGEM. It is not paid by the government. The licensed suppliers raise the money for the FIT by charging a small premium to all of their electricity customers. They are also permitted to charge for administration costs. It is predicted that by 2020 each electricity customer in the UK will have to pay roughly an extra £29 on their annual bills to cover this.

How is the Feed in Tariff calculated?
A meter installed by South West Free Energy will record all the electricity you generate. This meter reading allows the electricity supplier to calculate the amount you are owed. Payments are usually paid quarterly. It is important to realise that you will be paid for every unit of electricity you generate whether you use it or not. Using more of what you generate will reduce your energy bill but not reduce what you get paid.

Is the Feed in Tariff paid by my electricity supplier?
Nearly all electricity suppliers will pay you Feed in Tariff payments. They will all pay the same set rate so there is no advantage in going to a different supplier than the one you already use. Some very small suppliers may not have joined the scheme so in this case you can apply to any other supplier that does and get them to pay you the Feed in Tariff.

How long will the Feed in Tariff be paid?
Payments for Solar PV systems will be paid every year for 20 years. The Feed in Tariff payments will increase every year in line with the retail prices index (RPI). At the end of 20 years these payments will stop but you can still use the solar panels to save on your electricity bill and sell spare electricity back to your supplier.

Is the Feed in Tariff taxed?
No it’s all tax free for domestic customers. You do not have to pay any tax on the Feed in Tariff regardless how much you earn. It is very similar to an ISA and so is a very attractive investment indeed. Whereas a cash ISA will pay about 2 1/2 % the return on a Solar PV system including the Feed in Tariff and the savings on your electricity bill will be about 12%. The savings and Feed in Tariff will increase every year rising to an estimated 14% over the 20 years. Going green has never been so profitable!

For businesses the Feed in Tariff is treated as income but the initial cost of the system can be offset against profits and, if registered, you can claim back the vat.


How is the Feed in Tariff guaranteed?
The feed in tariff is designed to promote the use of renewable energy and so reduce our carbon emissions. The scheme is administered by OFGEM. It doesn’t cost the government anything as the payments are made by the energy suppliers. It also doesn’t cost the energy suppliers anything as they are allowed to charge all its customers more to pay for the scheme. So, in effect, people who don’t have a solar PV system will be paying the people who do. Under the terms of the electricity suppliers’ license the suppliers are committed to pay the clean energy cash back payments. Once the system is registered you are in effect locked in to the rates applicable at that time and guaranteed those for 20 years.

How much can I save on my electricity bill?
Solar PV systems generate the most electricity from mid-morning to late afternoon. If you use the electricity when you generate it you will in effect be getting free electricity.

Can I sell spare electricity back to my supplier?
Nearly all electricity suppliers will pay you Feed in Tariff payments. They will all pay the same set rate so there is no advantage in going to a different supplier than the one you already use. Some very small suppliers may not have joined the scheme so in this case you can apply to any other supplier that does and get them to pay you the Feed in Tariff.

What is a Solar PV system?
Quite simply solar photovoltaic (PV) panels produce electricity when exposed to daylight. The brighter the sun the more electricity they produce. Unlike other forms of renewable energy they have no moving parts to wear out, make no noise and do not require on-going maintenance. Unlike other renewable systems they are also very easy to install to existing buildings and require very little work internally so are an ideal way providing renewable energy to many homes and businesses.

Do Solar PV Panels have to face south?
No they don’t. Any roof or structure facing from West, South to East would be suitable. We can calculate the estimated output of any system taking into account angle and direction. Typically a west facing roof might produce 80% of the output when compared to an ideal South facing roof.

Where can Solar PV panels be mounted?
We can fit solar PV panels to all sorts of structures from house and garage roofs, flat roofs, walls, free standing frames. Where ever possible the panels need to be free from shade especially in the middle of the day. An on-site assessment will allow us to consider all options and come up with the best solution.

What is the Microgeneration Certification Scheme (MCS)?
In order to qualify for the clean energy cash back your solar PV system must have been installed by a MCS certified installer using only MCS certified equipment. MCS certified installers work to set minimum standards and are assessed annually.

I have been offered free solar panels. Where is the catch?
The company offering you a free system is doing so because it wants the clean energy cash back for itself. You may save £200 on your annual bill while they earn £30,000 from the clean energy cash back for itself. If you think that’s a good deal then you need to check out their terms and conditions. Consider who owns the panels, what happens if you sell the house or decide you don’t want them anymore? Most consumer advice says you’d be better off buying a system yourself even if you added the cost to your mortgage. The Energy Saving Trust have a web page dedicated to free solar panels which covers most of the things to consider.

What happens if I move home?
Installing a Solar PV system will generate savings and a tax free income. This is passed on to the new owner of any property. The desirability and hence value of a home with such an income and low fuel bills is going to be much greater than a house without a Solar PV system.

What happens if my property in rented out?
Fitting a Solar PV system would benefit you because as the owner of the property the clean energy cash back would be paid to you. In most cases the savings in electricity benefit the person renting the property so you could probably charge more in rent.

Why has the government brought in this scheme?
The government is committed to lowering CO2 emissions. This includes a target of supplying 15 per cent of the UK’s energy from renewable sources by 2020 compared to 2 per cent today.
One of the simplest and cheapest ways of doing this is to promote the use of renewable energy. This scheme has already been used in other countries such as Germany and Spain where it has been very successful. The number of systems installed far exceeded the original estimate. Compared with other countries the UK has been very slow to promote renewable energy.

Why has the government reduced the reed in tariff rate?
The cost of solar PV installations has dropped by 50% since 2010. The feed in tariff rate has been reduced by a similar amount meaning that the rate of return now is the same as when the feed in tariff started.

Are further cuts to the feed in tariff planned?
Yes. The government wants to continue to reduce the feed in tariff. Further cuts are planned every 3 months for newly registered systems. The important thing to note is that your payments will be based on the feed in tariff rate applicable when the system is first registered. The Government is not allowed the change anything retrospectively so the sooner you install a system the higher will be your feed in tariff payments. Also remember that the rate at which you get paid will increase every April by the retail prices index RPI.

Is there is link to the Energy Performance rating of the house?
From April 2012 all properties will have to be rated “D” of higher in order to be paid the highest rate of Feed in Tariff. However fitting a Solar PV system will, by itself, increase the energy rating. Our experience has showed that nearly all properties can meet the D rating. We can arrange for energy assessments to be carried out at both domestic and business premises. If you have bought the property in the last 10 years then you probably already have an Energy Performance Certificate.



Clean energy cash back or Feed in Tariff.
The clean energy cash back or Feed-in Tariffs (FITs) as it is sometimes known became available in all areas of the UK except Northern Ireland in April 2010.
Solar PV systems for homes
Fitting a Solar PV system to your home will reduce your electricity bills and provide a generous tax free income for the next 25 years.
Installations
South West Free Energy offer Solar PV systems to both domestic and business customers in the Devon, serving Plymouth, Exeter and surrounding areas
Solar PV systems for business
For business customers the income from a Solar PV system is treated as taxable income
About South West Free Energy
South West Free Energy offer Solar PV systems to both domestic and business customers in the South West
Not to be confused
Not to be confused with Solar Thermal panels which produce hot water Electric Solar Panels or Solar Photo-Voltaic (PV) panels as they should be called generate electricity when exposed to sunlight.
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