What Solar Panel Incentives are Available in The U.K.

There are two types of solar panel incentives in the UK and which cone you get will be dictated by your location.

It also depends on what type of solar panels you’re talking about. Solar thermal panels (produce hot water) or Photovoltaic panels (produce electricity).

In this article I’m only going to be looking at photovoltaic panels. I cover the Renewable heat incentive here

The two grants/incentives available in the UK are the Feed in Tariff (FiT) which covers England, Scotland and Wales and the Northern Ireland renewable Obligation Certificates (NIROCs) which covers N. Ireland.

Solar Panel IncentivesCommercial PV Array

To an extent they're pretty similar in the way they operate, but they do have some distinct differences.

They both allow you to get paid for every unit of electricity that you produce from the solar panels. 

Any of the electricity that you’ve produced that you haven't used is sold back to your provider.

All this helps make the proposal of photovoltaic solar panels stack up as an investment proposal.

Solar panel incentives - Feed in Tariff (FiT)

  • Receive payments for every unit of electricity you produce for 20 years.

  • The rates you receive ARE fixed and index linked for the 20 year period from the date on which you sign up.

    So while the rates are revised annually for new customers, once you sign up your rate is fixed for the full term.

  • The FiT scheme is administered by the Power companies. At the time of signing up for the scheme you can nominate the power supplier you would like to use and they will then administer your payments etc. Typically most users will nominate the power company that they buy their electricity from.

  • Provided your property is a household and is used to predominately generate electricity for the home the income from the FiT is tax free.

  • See the FiT rates here.

Solar panel incentives from Northern Ireland Renewable Obligation Certificates (NIROCs).

  • You receive a number of ROC’s for each unit of electricity you produce. As at September 2014 you would receive 4 Roc’s per unit. Each ROC is worth a certain amount which is multiplied by 4 to give your payment per unit of electricity produced.

    For example, if you’re signed up in September 2014 you would get 4 Roc’s per unit of electricity produced. You would then continue to get 4 ROCs per unit for the duration of the contract (20 Years).

    During the 20 years however, the value paid for each ROC can change annually on 1st October. But the number of ROCs you receive will stay at four.

    So if you sign up when a ROC is worth say 4.08 pence you would continue to get 4.08p x 4 = 16.32 pence/unit until the value of the ROCs are reviewed on the following October 1st.

    Even if the number of ROCs were to drop from 4 to say 2 ROCs/unit after you've signed up, you would continue to get 4 ROCs for the duration of your contract. It would only be new customers who would get the 2 ROCs/unit.

  • Receive payments for every unit of electricity you produce for 20 years.

  • Receive a second payment for every unit of electricity that you don't use in your home or business and sell back to the grid.

  • The number of ROCs you receive per unit is fixed for 20 years, however; the value of each ROC is NOT fixed and is reviewed annually on 1st October.

  • NIROCs are NOT index linked.

  • The NIROC scheme is administered by Power N.I. who is also the company that buys your unused electricity from you.

  • If you system is installed on domestic property your NIROC payments are tax free.

  • The rate for buying back your unused electricity is currently 5.1p/kWh (From 1st Oct. 2014).

  • Payments for systems under 10kW are paid annually.

Solar Panel Incentives Summary

As you can see from above there are a lot of similarities between the FiT and NIROCs as they’re designed to achieve the same goal.

However there are some distinct and fairly major differences which you need to understand fully before taking the final plunge to ordering your photovoltaic panels to start generating your own electricity.

Now that you're up to speed on the FiT and the NIROC solar panel incentives you may want to take a look at some of my other articles on understanding photovoltaic panels.

You might also like the following articles, or click here for the full site index.

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