Photovoltaic Panels (PV) - How it works

The solar array generates DC current by day which is converted to AC current and then fed back into the houses electrical network.

Presuming that there are some appliances in the house in operation, the electricity generated is used effectively to power these directly.

Any surplus is exported back into the grid through an export meter, for which you receive payment or credit according to the tariff you have chosen.

Hence you become a buyer and seller of electricity, exporting power available by day through your solar system, and importing by night from the grid.

Feed in Tariff

The feed-in tariff obligates utility companies to pay consumers with renewable energy systems a set rate for the unit of electricity generated by their system.

The Rate for retrofit PV System is 41.30p for pv systems are for a term of 25 years and the income is tax free. The rates will also be index-linked for inflation. Any surplus electricity exported back to the grid can be sold for a minimum of 3p per kWh.

Part of the buying decision may be based on the payback of the cost of the system. The payback period will be substantially influenced by future electricity prices, which are universally expected to rise at increasing rates in the future. For example, between May 2006 and June 2008, single rate electricity prices for the first 125KwH used rose on average 64%, and for subsequent consumption on average 30% (based on rates from N-Power, Scottish Power, Powergen, Southern Electric, Northern, Swalec, Yorkshire Power, Eastern).

 

Worked example of returns

1. System size = 2340KWp
2. Electricity Generated per year (assuming 850KWh per KW installed) = 1683KWh
(The average household in England is reported to use 3300KWh annually)
3. Income. The government Feed in tariff will pay 41.3p per KW generated = £695
4. Saving. The value of the electricity generated assuming that 70% is used. 1369KWh @ 10p = £118
5 Income. Assuming 30% of the electricity is sold back to the grid @ 3p = £15

Total Annual benefit (income + saving) = £825
NB: Tariff rates for electricity cost may vary; Amount of electricity generated by the PV system used at home may vary

Total benefit over 25 years, Tax free.

Example1 (No allowance for index linked feed in tariff, or energy price inflation) = £20,700

Example 2, Total benefit with F.I.T index linked (assumes RPI of 1.5% and energy price inflation of 2.5%) = £24,920

Example 3, Total benefit with F.I.T index linked (assumes RPI of 2.5% and energy price inflation of 5%) = £29,365

With systems starting at £6,000 CONTACT us NOW for a no obligation quote.