In April 2010 the UK government introduced the Clean Energy Cash Back Scheme as a financial incentive to encourage the uptake of renewable energy technologies. The Clean Energy Cash Back Scheme put in place FITs as a financial support mechanism for people undertaking renewable energy. The government need to encourage the uptake of such technology to help deliver on the 2020 renewable energy targets. The scheme pays you an amount for every unit of power (kilo Watt hour/kWh) that your system generates.
The amount paid per unit is dependant on the size of the system. For domestic systems, which are mostly under 4kW retro-fitted on homes this amount is 43.3p/unit. It is important to note that this is TAX FREE and indexed linked for 25 years. It is also dependent on the point at which you join the scheme, the Feed In Tariff is set to drop year by year from April 2012.
Currently there’s no smart meter to ascertain where the electricity goes after generation. A contract is drawn up with your energy supplier stating that 50% is used within your home and 50% is sold back to the national grid at 3p/unit.
This is a hypothetical figure. In a situation where your demand far exceeds the total generation of the system, you still obtain the 3p/unit for half the systems generation, even though you aren’t exported anything.
Then there is the money you save on your electricity bill. As you are generating your own electricity you will have to import far less. Your meter reading will be lower meaning your bill will be less. With energy prices set to rise, this element will become more and more valuable. Each unit of electricity that is surplus to the power requirements of your home is eligible for an export tariff which is in the region of 3p/unit depending on your energy provider.
Therefore, (assuming that your FIT is 43.3p/unit) for every unit of energy exported to the grid there would be a total payment of 46.3p.
