Feed in Tariff  - Example

Explained:

• House 2 uses a total of 3500 kWh of electricity per annum
• House 2 generates 2146 kWh of electricity per year from the solar electricity system (Generation Tariff)
• The occupants use 1073kWh of the electricity they generate (Avoided Costs) and exprort 1073 kWh to the grid because it is generated at times when House 2 does not use it (Export Tariff)
• House 2 uses 3500 kWh of electricity so needs to import 2427 kWh of electricity from the grid to meet this. a reduction of 1073kWh compared to imported electricity to House 1 (Avoided Costs)

The household receives benefits in three different ways:

1. Generation Tariff: A fixed price for each unit (i.e. kWh) of electricity generated by the solar electricity system, whether used within the home or exported, guaranteed for a period of 25 years at a rate of 41.3p/kWh = £886.30

2. Export Tariff: A price for each unit of electricity generated by the solar electricity system and exported to the grid, guaranteed for a period of 25 years at a minimum rate of 3p/kWh = £32.19

3. Avoided Costs: The savings from reducing the import of electricity by using the electricity generated from the solar electricity system, thus providing lower bills and the benefit of being at least partially protected from future price rises in electricity = £128.76

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