Feed-In-Tariff

Launched in April 2010, the feed-in tariff (Fit) scheme is a Government-backed incentive that’s designed to enable people to financially benefit from generating their own electricity using renewable technology.

Available to everyone, from businesses and communities to homeowners and schools, the feed-in tariff guarantees a minimum payment for every kilowatt hour of electricity  generated by a renewable electricity system. This is known as the Generation Tariff. In addition, an extra payment will be made for any unused electricity that can be exported back to the national grid. This is called the Export Tariff.

The amount of money you receive will depend on the size and type of the system you use to generate the renewable energy. For example, if you’re interested in installing solar PV panels, from 1 April 2012 you will be eligible to receive up to 21p per Kilowatt hour for installations registered from 12th December 2011. An additional 3.1p/kWh will be paid for any surplus energy exported back to the national grid.

Feed-in tariffs are paid over a 20 year duration from the date the system is first registered, with solar systems qualifying for 25 years. The amount of money you will receive will obviously depend on the size and type of the system you’re using to generate electricity.

According to the Government, tariffs should cover the initial cost of the installation of the technology with a return of up to 8%. In the case of solar PV panels for instance, technically you should be able to earn back the capital costs of the installation two or three times over the course of 25 years.

What renewable technology can benefit from FITS?

• Solar PV
• Wind turbines
• Hydroelectricity
• Anaerobic digestion
• Micro-combined heat and power systems (Micro-CHP)

10 facts about feed-in tariffs

1. You reduce costs on your electricity bill when you use your own energy.
2. Ofgem regulates the feed-in tariff.
3. This type of “feed-in” tariff was first introduced in Germany in the 1990s, although back then it only applied to power which was “fed in” to the electricity grid.
4. With the feed-in tariff you get to benefit in three different ways. You receive a payment for the Generation tariff and the Export tariff, plus you’ll also benefit from savings on your energy bills.
5. The money you receive for both the Generation and Export tariff is paid by the energy suppliers. It doesn’t come from the Government. The costs are spread equally across all the energy companies.
6. Solar PV, wind turbines, hydroelectricity, anaerobic digestion and micro-combined heat and power systems (Micro-CHP) all qualify for the feed-in tariff scheme.
7. To qualify you will need to have had the technology installed between 15 July 2009 and 31 March 2010 and you transferred to the feed-in tariff before 1 April 2010 OR the technology was installed after 1 April 2010 by an installer who is certified under the Microgeneration Certificate Scheme (MCS).
8. The feed-in tariff scheme is currently not available in Northern Ireland, although it remains under review.
9. From 1 August, payments for solar installations of more than 50kW were lowered, in a move designed to open up more of the funding pot for domestic installations.
10. From August 2011, installations of solar power that are between 50 kilowatts and 150 kilowatts of capacity will receive 19p per kilowatt-hour produced, down from 32.9p. Larger installations of up to 250kw will receive 15p per kWh and installations of between 250kw and 5 megawatts of capacity will get 8.5p per kWh. Both larger sizes were previously paid 30.7p per kWh.