Feed in Tariffs
Frequently Asked Questions
Why does the Government support the installation of PV panels?
PV panels generate renewable electricity, however, unless incentivized, the electricity produced from PV panels would be too expensive and the investment would not be attractive.
Thanks to government support, a beneficiary can choose between two options:
- A monetary grant to help with the initial investment cost, together with a short term Feed-in Tariff
- Long Term Feed-in Tariff of 20 years without a Grant.
In both cases, the investment is viable and the investment will be fully recovered before the expiry of the Feed-in Tariff (FiT) guaranteed period. Once this period expires, the user will continue to earn income when either selling electricity to the grid, or save on their own electricity bill when the generated electricity is consumed on site.
In its efforts to combat Climate Change and reduce Greenhouse Gas Emissions, Malta needs to increase the use of renewable energy sources. This target is for the benefit of all Maltese citizens as it also contributes towards better air quality.
Does investment in PV Panels make sense?
Similarly to other investments, a PV system investment should not be considered as short term. PVs typically have a lifetime of at least 20 years and therefore, one should consider the overall return when comparing it to the initial capital invested.
In fact, a person who opted for a PV system investment with a grant, benefited from a 50% financial assistance and a 22c/kWh Feed in Tariff for 6 years. This means that they would typically receive more than the amount invested during the first 6 years and roughly twice the amount invested over the lifetime of the project. The amount would be even higher if part of the electricity generated is offset with that consumed.
When seen as an investment, the overall rate of return of a PV system is significantly higher than that expected from most bonds traded on the local stock exchange or bank savings accounts at present. In fact, even after the Feed in Tariff guaranteed period expires, one would not only have recovered the capital outlay, but will continue to receive around 5% return on his investment by selling electricity at the market price of 7c53.
What should I do when the Feed in Tariff guarantee period expires?
Once the Feed in Tariff guarantee period expires, it is recommended that you apply with the REWS so that you no longer receive a flat rate for all electricity generated but rather utilize as much electricity as possible on site, offsetting own electricity bill, and only sell any excess electricity to the grid. The relevant form may be downloaded from the following REWS link: http://downloads.rews.org.mt/files/6c381a2d-1ab1-4805-9c95-d2c4a228cced_3e6ff35c-f4a3-48ce-85d7-20dfc125ae7e.pdf
Applications are to be submitted with the REWS. Shortly, an online application shall be made available by ARMS Ltd.
Should I remove the PV system once the Feed in Tariff guarantee period expires?
It is not recommended that a PV system is removed once the Feed in Tariff guaranteed period expires. Firstly, the electricity generated can be sold to the grid, or used on site and provide a return of around 5% for the remaining lifetime of the system. This is well above typical returns on secure investments such as government bonds or bank savings accounts. Secondly, one needs to remember that the high level of grant and Feed in Tariff support received from government and EU funds was intended so that PV panels are kept for the duration of their lifetime and hence contribute towards the common effort to reduce Greenhouse Gas Emissions. Thirdly, as prices of storage (batteries) fall, it is expected that not far off into the future these could be integrated with existing PV systems such that one would be able to use all of the electricity generated to offset his own electricity bill. It is, in fact, recommended that when an invertor is up for replacement, this should be replaced by a hybrid unit which is capable of integrating battery storage.