Financial incentives for solar panels
Receive payback for the generation of electricity from solar energy. Benefit from 0% VAT on solar panel systems
What incentives are available?
Utility providers have paid home owners for generating renewable electricity via the Feed In Tariff between 2010 to April 2019.
From the 1st January 2020, new laws came into effect to guarantee homes and businesses who generate renewable and low carbon electricity to be paid for any energy they supply to the grid under the Smart Export Guarantee (SEG).
Following Rishi Sunak’s (then chancellor of the Exchequer) announcement of 0% VAT is to be applied to solar panel systems to support the green energy industry. The changes came into effect in April 2022 and will last for 5 years until 2027.
What is the SEG?
Under the SEG, homeowners and businesses can be paid per kWh, by large energy suppliers, for the energy exported to the grid.
The price is be determined by each energy supplier and tend to vary between 0.1p and 5p per Kwh. Whilst the energy suppliers have to set the price of their SEG above 0 per kWh, the contract length is completely up to them.
Small energy suppliers (companies with less than 250,000 customers) don’t have to offer a SEG. However, should they decide to offer one, they would have to follow the same SEG rules.
Who is eligible?
To be eligible homes or businesses would need to have the following:
- A solar PV system with a capacity limit of 5 megawatts (MW)
- Microgeneration Certification Scheme (MCS) certified equipment
- A solar PV system installed by an MCS approved installer
- A smart meter.