Solar Panel Grants, Loans And Tariffs
There are many ways you can pay for your solar panels. Learn more about grants, loans and tariffs that can help you get your solar panels for less. The Eco Experts explain:
Solar panels are one of the fastest growing renewable energy technologies in the UK. They're easy to install, they're readily available, they're efficient and they're one of the only forms of generator that are completely carbon neutral. For these reasons, solar panel installation is expected to grow at a rate of 15% each year.
The downside of solar panels is that they're certainly not the most affordable of sustainable energy system. While costs have dropped by around 50% in recent years as the technology becomes better utilised, it can still cost up to £3000 per installed kW, meaning even the most budget of solar generator can be priced at around £6000-£8000. Many homes will require a larger system, and businesses can find themselves paying hundreds of thousands for a system with the ability to provide adequate power.
Fortunately, these high installation costs haven't gone unnoticed, and there are a number of options available for both businesses and homeowners that could help to fund the purchase and installation of the equipment. Funding comes from a variety of sources including both private and public organisations, including the government who are striving to meet their renewable energy targets.
Loans For Solar Panels
Local authority loans are one of the best options available, but again, eligibility is dependent upon the area you work or reside in. Some authorities may have no funding available, whereas others, such as some authorities in Wales, offer loans of up to £5000 with a 0% interest rate for homeowners. Other authorities will pay up to 50% of the cost for commercial installations. Most local authority loans will come with added interest, but the rates are typically quite competitive.
Homeowners may benefit from the Engensa SolarLoan with a 7.9% interest rate, whereas small businesses in Wales and Northern Ireland may be eligible for a 0% loan of anywhere between £3000 and £100,000 from the Carbon Trust. Although larger businesses and offices based in England and Scotland don't qualify for these loans, there may be other forms of funding available from the Carbon Trust's Implementation and Finance Programme.
Private loans are a further option. The most obvious choice is to apply through your bank or building society, or through major supermarkets and high street stores which have banking departments, but be sure to check out loans offered by solar panel installation companies, too. The rates for these loans could be some of the best available as companies compete for your business.
Solar Panel Grants
For both the domestic and the commercial sector, the best grants are usually offered by local authorities, although the amount available, and even if anything is available at all, is dependent upon your home location, or the county in which your business is based. As it's somewhat of a postcode lottery, many people may find they greatly benefit from local authority grants, whereas many may also find there's nothing on offer in their particularly region.
Those lucky enough to work or reside within grant-offering boundaries can expect amounts of £300 to £500 for new installations of renewable energy systems including solar panels, while some authorities have dedicated grants specifically for solar panels which can reach up to £1000.
There is a government grant available for homeowners with solar installations. All households in England, Scotland and Wales can apply for a Renewable Heat Premium Payment to help towards the upfront costs of the system as long as the residence has adequate insulation that will ensure the system works efficiently. The payment for solar installations is £300 and is expected to be available until at least summer 2013 when newer options are scheduled to be rolled out.
Tariffs for Solar Power
There are currently two tariff-type payments, with a third expected to be launched in 2013. Tariffs provide ongoing financial assistance and payments to those utilising renewable energy systems and amounts are based on the size of the system installed, the amount of energy generated and the amount of energy used.
There are two types of Tariffs available for solar power. By far the most important is the Feed-In Tariff, which pays a rate of 16 pence per kWh for generators under 4 kW, 14.5 pence for those between 4 and 10 kW and 13.5 pence for those between 10 and 50 kW.
The export tariff is paid for all surplus energy that is sold back to the grid. This is set at 4.5 pence per kWh exported. Both tariffs are expected to be reviewed every three months from November 2012, so tariffs could change fairly regularly. Both the generation and export tariff are paid by your energy supplier; a mandatory request from the government.
The third tariff payment is the government's Renewable Heat Incentive Phase 2, expected in summer 2013. Phase 2 is going to extend the tariff payments to homeowners, although the exact rates have yet to be confirmed. Phase 2 is expected to cover solar installations as well as many other forms of renewable heat system.
Is It Worth It?
Absolutely. Although the upfront costs may cause a bit of hesitation, the saving that can be made not only from reduced energy bills but also from an upped income thanks to grants and tariff payments could see the initial cost offset within only a few years.
The Feed-In Tariff scheme alone could see homeowners bringing in an extra £600 per year, and reduced bill payments could total over £300. Businesses could find themselves with an even larger additional income thanks to the RHI scheme, although exact figures would greatly depend on the size of the system.