Important Information for Stepclever Residents and Businesses

From 1^st April 2010 you will be paid substantially for every unit or kilowatt hour (kwh) that you generate, whether you use it or not. The rate at which you are paid is substantially higher that the rate at which you buy electricity.  This new mechanism is called the ‘Feed in Tariff’. Relating to the fact you will be feeding surplus electricity into the National Grid, and no don’t worry, from an installation point of view it’s uncomplicated and automatic.

Feed in Tariffs

Feed in Tariffs would have to be seen now as one of the best investments available to you, regardless of your ‘green’ credentials. Recently The Times, The Telegraph and The Guardian all ran articles suggesting the same. You may have seen them?  The Guardian article leads with....

 ‘If the government offered to pay you £1,000 a year for the next 25 years, in return for an up-front investment of £12,500, you'd snap it up in a second. Well, that's pretty much the deal on offer this week after the government finally revealed what it will pay those who install electricity generating solar panels – in and around their homes – through the new "Feed-in Tariffs" (FITs).’

 Followed by

 ‘In the week that the energy regulator,  Ofgem, warned the nation to expect 20% electricity price hikes by 2020, and warned future supplies were in jeopardy, investors in solar panels will have the added benefit of being a net provider of electricity, and largely insulated from future price hikes that could see household bills top £2,000 a year by 2020.’

What the articles didn’t make clear was how Feed in Tariffs can provide income for your business, as well as your home.

 The big news about Feed in Tariffs is that for domestic installations the income is tax free, fixed for 25 years (20 for wind turbines) and will rise in line with the Retail Price Index (RPI). It is geared to provide an 8-10% rate of return. Try getting that from a bank or other financial institution! We can demonstrate how a domestic home that installs solar panels can, from an investment of between £10,000 and £15,000, get an annual tax free income/saving of between £800 and £1,400, fixed for 25 years. A recent fairly typical example showing a 246% return on investment over 25 years.

For wind turbines (not building mounted), for example for homes with some land, farmers, barn conversations, any home with a reasonable amount of space, the income could be better still. A project we have just specified shows an annual tax free income/saving of £8,527.50, fixed for 20 years. From a £38,000 investment this shows a 448% return on the investment over 20 years. The payback on this system is 4.45 years. However, as the income is tax free, if you consider the amount of money you would have to earn to make this same amount, as a 22% or 40% tax payer, the payback reduces to 3.5 years or 2.67 years respectively.

For businesses

Feed in Tariffs are equally available to businesses. The only difference being the tax implications. It is still a little grey as to how this will be accounted for, but all government documents refer to FIT’s as being tax free. A word with your accountant would be required. However the levels of return, the fact the tariffs are fixed for 25 years (solar) or 20 years (wind), and that they are index linked applies. So if a business has a nice south facing, or flat roof, or a piece of land for a wind turbine, then they can add a guaranteed revenue stream to their business.

Best of all

For both domestic and business installations, not only will you be making a return on your investment, you will eradicate, or put a dent into your energy bills at the same time. Providing your home or business with its own green and clean energy supply. Insulating you in full, or in part, against future energy price increases.

Better still

You will be doing your bit to reduce our reliance on fossil fuels, and to caring for the environment.

For more information on grants, loans and the Feed in Tariffs see our summary sheet (below) or give us a call.

http://www.eco-environments.co.uk/res/media/pdf/GrantsandLoansV7.pdf