The UK government has been promoting the use of green energy for many years. The main way it did this was by lowering the cost of solar panels for new buyers. The main incentives offered to UK residents are:
New Green Homes Grant 2020
The New Green Homes Grant program was announced in July by the UK government. Homeowners and landlords can receive vouchers of £5,000 – £10,000 to make energy-saving renovations to their homes. However, no specifics have been announced for the program, which will launch in September 2020.
The Feed-In Tariff
The program was closed to new applicants in 2019. However, registered members will continue benefitting from the scheme. Those with solar panels are paid a set amount of money for each kWh they send to the grid. You could receive payments from your energy supplier or a list of other suppliers. Under the program, you were paid for all energy produced by the system plus half of all power you send to the grid.
The Smart Export Guarantee (SEG)
SEG was launched to replace the Feed-in-Tariff and it was established on 1 January 2020. Any homeowner with a solar system of up to 5MW capacity can participate in the scheme. It allows homeowners to sell their excess power to the grid. A home has to be fitted with a smart meter to measure to measures the energy exported to the grid. All licensed energy suppliers in the UK must now offer an export tariff to UK homeowners. Under the scheme, solar battery storage is also included.
Free Solar Panel Scheme
The scheme is now defunct. Under the scheme, if you did not have funds to purchase solar panels, you could get them from a company that would rent your roof space for up to 25 years. The company would install and care for the panels on your roof. In exchange, they would get the feed-in-tariff payments.
This scheme was replaced with the solar buyback scheme. In this scheme, a company would offer the homeowner a lump sum payment and collect the FIT payments one would get. However, with the FIT scheme over, it is not clear whether companies would still offer the payment in exchange for the SEG payments. If so, it is important to evaluate the offer in relation to the payments you would get. It will then help you determine if a buyback scheme is a fair deal.
How UK Citizens Can Get 5% VAT on Solar Systems
In the UK, the solar VAT charge for solar installations rose from 5% to 20% on October 1, 2019. In the month prior, there was a rise in booking as people tried to get the lower 5% VAT. However, it is still possible to get the 5% VAT.
The conditions are that the cost of materials has to be less than 60% of the total installation cost, you are 60 years and above, you qualify for certain benefits, or your building is a care home, children’s home, hall of residence, or housing association. The rules apply to batteries when installed as part of the solar system. If the batteries are retrofitted, the VAT remains at 20%. VAT will only apply to the material cost while labour costs will remain at 5% VAT
How to Find Information about UK Green Energy Incentives
The UK government provides a comprehensive guide on various energy incentives it offers homeowners.
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