Having seemingly been swayed by the voluminous feedback and the government’s need to reduce the UK’s carbon footprint, the previously announced cuts of 87% to the headline rate have been somewhat reduced, leaving a viable market for a well-designed and utilised system.
For new installations between 10kWp and 50kWp, the generation tariff has now been set at 4.59p/kWh.
If we take the example of a typical 30kWp array, this could give a generation payment of approximately £1,300 per year. Additionally, considerable savings could be made by the consumption of self-generated electricity and from the export tariff, which helpfully continues to be a deemed figure for a system below 30kWp.
Therefore a 30kWp array, on a site using a conservative 50% of generated electricity locally, would benefit against buying electricity from the grid by around £1,700 per year. On high-utilisation sites, a more reasonable estimation of 70% local usage can be made, with the cost saving per year increasing closer to £2,350.
These high-utilisation sites also benefit further from having the export tariff deemed at 50% of generation, irrespective of what is actually exported. Another £700 credited to the bill each year.
So in a nutshell, what returns can realistically be expected from a PV system in the future? Putting these numbers together, a payback in 11-12 years, with a return on investment of 78% is now the new norm. With considered usage and an increased reliance on self-consumption, this payback period could drop to around ten years, with an ROI of 109%.
Most would argue that the previous tariff system may have been far too generous. Many will argue that this tariff system has not been cut severely enough but these are discussions for the politicians and environmentalists.
Never the less, in the right circumstances there still remains a good opportunity to make a sound financial investment whilst reducing your environmental impact.
So as we move forward the PV market is still fighting FiT.
