The Feed-in-Tariff (FIT) gives a guaranteed payment for electricity produced from eligible renewable energy sources. This is in the form of a payment in p/kWh, which varies according to type and size of technology. The FIT rate also varies over time, as the UK government estimates that the costs of installing renewable technology will decrease, therefore less incentive will be required from the FIT.
The FIT is due to be reduced each year by 8.5% from 2011 onwards for Solar Photovoltatic (PV) systems under 250kW and wind technologies (under 100kW. This means that, for example, this year your 3 kWp solar PV system was eligible for a FIT rate of 43.3p/kWh, but next year it will be eligible for a rate of around 39.6p/kWh if the system is accredited after 31st March 2012. You need to install your system and get it accredited before the 31st March therefore to avoid these reduced rates. There are many different levels of FIT depending on technology and size of technology and all rates may change with government review - therefore it is recommended that specific projects are checked with Ofgem (link below) for clarity. Solar projects can be relatively quick for installation (depending on building and planning) but wind projects can take several months (or longer) - so it is best to start reivewing this ASAP.
DECC is reviewing the FIT levels, therefore these prices may be changed. More information should be available on the tariffs for 2012-2013 at the end of 2011. The degression values already published (in the link below) are guidelines of what the rates may be in the future, however these may change according to the review. The rate of return on the investment should be similar as the FIT rates should reflect the costs of installation. Rates will also change with inflation - hence this year they actually increased as inflation increased.
A useful table from Ofgem summarises the predicted change in the FIT rates: http://www.ofgem.gov.uk/Sustainability/Environment/fits/Documents1/Feed-in%20Tariff%20Table%201%20August%202011.pdf
If you have a renewable project of over 45kW and are considering financing and funding options, please contact CO2Sense, as we may be able to support your project through our investment fund.