Making Money from your Commercial Property using the Feed in Tariff
Feed in Tariffs for Commercial Property
In April 2010 the Department of Energy and Climate Change (DECC) introduced Feed in Tariffs of FITs for renewable energy to incentivise homes and commercial property owners into becoming small scale electricity generators. By becoming a small scale solar electricity producer commercial property owners can generate electricity from solar panels and make money from every kilowatt hour of electricity produced. Large commercial properties will be able to earn bigger profits from Feed in Tariffs than residential properties because more solar panels can be installed on larger rooftops or property grounds.
How do Feed-in Tariffs Work?
The idea behind Feed-in Tariffs is to use commercial properties to generate their own solar power and have some of the power left over that can be exported to the national grid in order to provide renewable energy to other consumers. The profitable aspect of commercial properties exporting excess solar electricity to the national grid is that it is paid for at an even greater rate than energy consumed at the property. Up to 43.3p per kWh is paid for all commercial solar electricity generated by solar panels but an extra 3.1p per kWh is paid for unused energy sent back to the national grid. The opportunity to make money from a commercial property without having to rent it out has never been so good thanks to Feed in Tariffs as many commercial properties are closed during the weekends enabling 100% profit solar electricity generation from the export tariff element of FITs.
MCS Suppliers and Installers
One of the main stipulations put in place by the UK government is to control the standard and quality of solar products and companies that are introduced into the UK. The Microgeneration Certification Scheme or MCS is responsible for approving solar energy products for UK use and Feed in Tariffs will only pay out on MCS approved solar panels. In addition, only solar panel suppliers accredited by the MCS can fit solar panel systems to your commercial property that you can receive payments for under FITs. This necessitates the use of only MCS accredited commercial solar panel suppliers and installers other wise you will not receive any money from the government rebate scheme.
Top Tips for Maximum Returns
The key to making money from commercial solar panels is to not build solar panel systems greater than 50kW for maximum cash benefits. In August 2011 the DECC will be reducing the amount payable to solar panel systems higher than 50kW and below 150kW, which will earn 19p per kWh as opposed to 32.9p per kWh before 1st August. This is only to encourage more small scale commercial ventures and home owners to benefit from the system and still offers tremendous scope to make money from commercial property so long as one understands how Feed-in Tariffs work. So long as a commercial property keeps the size of their solar panel system below 5MW then they can still make money using the Feed-in Tariff. Large commercial property solar systems from 150kW to 250kW will earn 15p per kWh of electricity produced from the 1st August 2011 as compared with 30.7p before .
Real Life Example of Solar Profits
To give you an idea of size, Glastonbury Festival site, Worthy Farm, installed the biggest private solar panel system in the UK in November 2010. It comprises of 1100 solar panels and is rated at 200kW, well within the 15p tariff band. As an additional note it was estimated that Worthy Farm owner, Michael Eaves, will earn £60,000 a year at the old rate of 30.7p per kWh. This amount will reduce by around 50% at the revised lower rates but still represents a huge yearly profit potential. If more energy is exported than is used then the additional 3.1p per kWh will be due and will add to profits.