# Calculating Feed-in Tariff returns for solar panels

The UK Feed In Tariff dropped in July 2013.

It went from 15.44p per kWh to 14.90p per kWh. The Export tariff remained at 4.64p per kWh sent back to the grid. To make this easier to understand, look at an example of how returns are calculated for everything you generate ( The Generation Tariff).

In Cornwall we get a solar irradiance factor of approx 985 per kW per year, this is subject to a few conditions, firstly that the roof is facing south and has a pitch of 30 to 45 degrees, losses are very little if the roof pitch is lower. The second condition which is more important is that there is no shading on the roof. Bearing these factors in mind a simple calculation can be done to estimate returns, for this example we will look at a 4kW array in Cornwall…

985 × 4kW = 3940 is the calculated solar irradiance factor, this is then multiplied by the existing feed in tariff currently set at 14.90p

(3940 × 0.1490 = £587.06 per year) The existing tariff of 14.90p is to remain in place until 1st of January 2014.

Compare this tariff to the previous tariff of 15.44p and you can see the losses are very little.

Solar irradiance factor stays the same at 3940 the example illustrates (3940 × 0.1544 = £608.34) a loss of £21.28 per year. The next calculation to consider is the Export Tariff this is set at 4.64p per kW and has not been affected by Tariff changes,although this tariffis called the Export Tariff in the majority of domestic installs the amount you send back is estimated and not based on an export meter.

This calculation is based on 50% of everything you generate. The calculation is based on the same scenario as the above, with a solar irradiance factor of 3940 (3940 / 2 = 1970 × 0.0464p = £91.41) it can estimated that the yearly repayment on the export tariff would be £91.41.

The third repayment to consider is savings you make from using the electricity you generate, this is dependent on habits, this can be anything from £100 to £800+ if we use an average saving of £300 we can look at a return on investment (ROI).  Generation tariff  £587.06 + Export Tariff £91.41 + Savings £300 = £978.47 annually for the lifetime of the feed in tariff which is 20 years = £19,569.40 this is a basic calculation that has not taken into consideration the electricity increases to come in the future and both the generation and export tariff increases which increase at the rate of inflation protecting your investment further.

Based on the average cost of a 4kW system, £6,000 inc V.A.T and the above scenario, you could be out of your investment in as little as 6 years.

The above scenario is subject to an energy performance certificate of grade D or above.

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