but they get the returns*; you just get to use the free electricity when it's available.
*which are wholly disconnected from the amount of electricity produced; it's a very silly giveaway which is bound to be closed off by the government any time now
This is bizarre
You get 100% of the payment for what you produce, even if you use it all yourself.
£16k for 4kWp sounds like a typical first quote price.
The Feed-in Tariff is not really a "Feed-in" to the grid tariff, it's an incentive to increase the uptake of renewables and provides a decent return on your investment, rather than a decent return for feeding power back to the grid.
You get three income streams from installing domestic PV. In order for value they are:
1. the FIT generation payment (varies, but is 41.3p for domestic retrofit < 4kWpeak)
2. the savings you make by offsetting against reduced import electricity from the grid
3. the FIT export payment (3p/kWh for every kWh you export). Export is currently deemed at 50% of total generation, but once smart metering is rolled out in the next few years the export payment will be based on actual measured export.
The tendency amongst domestic consumers is to think in terms of simple payback calculations - e.g. it'll take about 10 years for me to get my money back. However, if you think in terms of investment income then it starts to make more sense as the FIT was designed to deliver 5-8% return on investment. Factor in that this payment is INDEX LINKED TO RPI AND TAX FREE then in real terms it's worth perhaps 9% or more. You won't get that of an ISA any time soon.
The average home occupancy before moving is about 12 years. Estate agents haven't yet really figured out how to value a home with PV on it. The FIT is transferrable to the new owner, so when you sell up you're selling a property with an ongoing income stream and a valuable asset strapped to the roof.
If the PV does take 10 years to pay back, there's still another 15 years of FIT income (it pays for 25 years on PV), and after that you still get the savings from the reduced import.
Notes of caution:
1. PV output degrades over time, but MCS accredited panels will generally give at least 80% of "as new" performance after 20 years.
2. Mean time to first failure of the inverters is likely to be much shorter - about 10 years or so. Accordingly, you'd need to factor in £500 - £1000 to replace the inverter half way through the FIT period.
To put that into context, my (sub optimally located) 3.5kW peak output (which only gets to about 2.85kW because it faces WSW) earned me £525 in FIT income from mid May - mid August this year.
Hope this helps.
Q