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Solar PV and its Benefits

Solar photovoltaic technology in simple terms collects the sun’s free energy and transforms it into electricity that can be used in the home and diverted back into the national grid. The benefits are compelling – substantially lower electricity bills in light of spiralling energy costs plus guaranteed earnings from the utility companies through the Government’s Feed in Tariff. Where else can you get a return on your investment of between 8% and 12%!  Whats more it’s a great way of reducing your carbon footprint.

How It works

Solar PV is all about daylight, not heat. In fact if the panels get too hot they will actually lose efficiency so in effect the UK has the perfect climate for solar as we rarely get too hot and being in Northern Europe we get more hours of daylight than hotter areas in Southern Europe. Daylight causes the silicon in the panels to react which in turn produces electricity. This electricity is called Direct Current (D.C.) but cannot be used in our home's or businesses as the voltage is not regulated.

The DC power is then funneled through an inverter which changes the power to Alternating Current (A.C.), which we can use for our light switches and wall sockets. When the power leaves the inverter as A.C. it then passes through a generation meter which logs how many kilowatt hours of energy your system produces (your generation tariff is paid on this figure) before it reaches your consumer unit (fuse box) and is ready for use. If energy is not used, it is automatically exported to the national grid.

As you will be consuming your own free renewable energy, this means that you don’t have to buy it from your supplier which will save you money. You will see a marked reduction in your electricity bill.

Feed In Tariff Explained

Clean Energy Cashback (also known as Feed In Tariffs), introduced on 1st April 2010, provide financial incentives for people and businesses to install electricity-generating technologies such as solar PV panels and wind turbines. It will do this by guaranteeing a minimum payment for the electricity generated as well as the electricity exported to the national grid.

There are 3 ways of benefitting from the Feed in tariff:

  • Generation Tariff  - For every kilowatt hour (kWh) of electricity your system produces, you will receive a set amount as per your feed-in tariff rate. You can consume this renewable energy yourself which means you don’t have to buy it from your supplier, so in effect, this renewable energy is free of charge and you get paid for generating it.
  • Export Tariff - If you do not use your renewable energy, it is automatically exported back to the national grid. For every kWh you export you receive a set amount as per your feed-in tariff rate. At this moment in time, we cannot measure how much you export (unless you have a smart meter) so the government rule is that it will be assumed you will export 50% of what your system produces. This will be paid to you as an export tariff rate (you may have consumed all of your free renewable energy and exported nothing, but as this cannot be measured you will still be paid for your 50% export)
  • Energy Used - The more free energy you use the less you will have to take from the grid. A change to your habits can benefit your returns greatly, where feasible, use your appliances during the day and particularly when generation is high during the day (sun is bright, and shining directly on the panels and no cloud cover is ideal). The electricity generated by and used from the system is FREE, while any electricity bought from the grid is charged at the going rate from the utility company. So the idea is simple – ‘Daytime is Win time’

How much does it cost and how much money can I make?

This is dependent on the size and suitability of your roof and how much you wish to invest. Systems vary in size and costs range from around £5000 to £20,000 and return on investment can be between 8% and 12%.