Solar Panel Feed-In Tariff: How You Can Still Benefit
Last Updated: 22/05/2019
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5 min read
The solar panel feed-in tariff officially ended 31 March 2019 however you can still benefit from the payments which accompanied this scheme.
The Government established the feed-in tariff to encourage people to install solar panels as part of its drive to move to more renewable energy sources. Amid some controversy, it closed the scheme to new applicants at the beginning of April 2019.
However the 20-year contracts which accompanied the feed-in tariff deal are attached to the properties which installed the solar panels and not the owners of the properties.
This means that if you buy a house which has solar panels installed, which the previous owner bought outright, you can still take advantage of the time remaining on the original 20-year contract and receive remuneration at the rate which prevailed at the official closure of the feed-in tariff scheme to new applicants.
You can also get paid as a result of the export tariff, under the same contract, which remunerates you for unused energy you feed back to the grid. [We'll use the feed-in tariff as an umbrella phrase to cover both individual aspects of the same scheme overall].
This article explains this development and looks at:
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Looking at Buying a House with Solar Panels?
Whether you're buying a house with solar panels you'll own yourself or where you'll be carrying on an existing lease the panels, our experienced property lawyers can help ensure that you're buying with confidence.
* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels
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What is the feed-in tariff and how much does it pay?
The feed-in tariff is a payment from the Government (but paid via energy suppliers) to pay households in England, Scotland and Wales for all the electricity they generate via solar photovoltaic panels – whether they actually use it or not. The rate, as of 31 March 2019, is 4.07p/kWh.
The feed-in tariff is income tax-free and paid quarterly by energy suppliers. It is guaranteed for 20 years, and index-linked so it rises with inflation.
Did you know?
The Energy Saving Trust estimates that panels registered at a typical home might typically earn £150/year under the feed-in tariff.
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What is the export tariff and how much does it pay?
The Export Tariff is a payment for energy you generate via your solar panels which you don't use and send back to the grid (unless you have an export meter, it's normally assumed there's a 50:50 split). As of 31 March 2019 the rate is 5.03p/kWh.
You need A 'D' rating on your Energy Performance Certificate (EPC) (click to read more about this) to get the full feed-in payment (4.07p/kWh). If the EPC rating of your house is below D, this falls to 0.43p/kWH, making the incentive considerably less attractive. You need an EPC if you're selling any property or are a landlord; these are valid for 10 years.
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Can you claim the feed-in tariff if you buy a house where solar panels are being leased?
When you lease solar panels from an energy company (they effectively lease your roof space for a period and in return give you reduced price or free electricity for the energy you generate in return), the company normally itself claims any payments from the feed-in and/or export tariff.
In general terms this means that, unless the seller of the property with solar panels that you're buying actually owned the panels outright, it's unlikely that you'll be able to be remunerated by the feed-in and/or export tariff. You should, however, investigate the relevant contract's terms.
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When buying your solar panelled property, what should you do to ensure you get payments from the feed-in tariff?
You must communicate with the existing energy company which the previous owner was using and had the contract with.
Once you know which company this is, you simply ask the company to transfer the existing feed-in tariff contract, assuming it still has time left to run from the original 20 years, to your name/s.
How do you find out whom the seller's electricity supplier is?
This information should be in Property Information Form TA6 (click to find out more) which the seller has to fill in and send (via their solicitor) to your conveyancing solicitor.
If this information isn't given for any reason, you should immediately flag it up for further enquiry via your solicitor.
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Does the feed-in tariff end if the energy company it was signed with go out of business?
No.
The way the contracts were written, they are attached to the relevant properties rather than the people who signed them, as previously stated.
This means that even if, during the 20-year length of the contract, the energy supplier which originally signed the contract went bust, another energy company has to honour the contract's terms for the remaining duration.
An Ofgem spokesperson told us that there might be some work involved in finding a company to take on the remaining contract, but as a rule of thumb, this should not prove too difficult if you approach a large energy company.
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Where can I find out more about buying a house with solar panels?
Please read our companion article Buying a House with Solar Panels
Looking at Buying a House with Solar Panels?
Whether you're buying a house with solar panels you'll own yourself or where you'll be carrying on an existing lease the panels, our experienced property lawyers can help ensure that you're buying with confidence.
* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels
Written by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Reviewed by:
Caragh Bailey
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
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