The Feed-In Tariff, also known
as FIT, became available in the UK on April 1 2010 and is the
electricity sector of the Clean Energy Cash Back scheme – a
Government-backed scheme that pays people who create their own
electricity using green technology including
solar PV
panels.
The Feed-In Tariff guarantees a minimum
payment for all electricity generated by the system, as well as
an additional payment for the unused electricity produced that
can be exported to the grid, known as the Generation tariff and
Export tariff respectively. These payments will boost household
savings as bills will be reduced by using electricity generated
on-site.
The tariff is available to everyone –
households, landlords, businesses and even communities and
organisations like schools and village halls – and will be
overseen by Ofgem which regulates the electricity and gas
markets in Great Britain.
How much money could I receive?
The amount of money you receive depends on
the type and size of the system you use to generate the
renewable energy. The good news is that the biggest payments
come with solar PV panel technology with as much as 43.3p per
Kilowatt hour available – see table below for all renewable
energy technology.
As well as the payment you receive for
generation, an extra 3p per Kilowatt hour of electricity
produced that is exported to the grid will also be received,
taking it to a total of 46.3p/kWh.
According to the Government, these
tariffs should cover the initial cost of the installation of the
technology with a return of up to eight per cent. With solar PV
panels installed, that means you should earn back the capital
costs of the installation two or three times over the duration
of the tariff as well as making sufficiently reducing your bills
You can calculate this using the Solar Guide
Solar PV Feed-In Tariff Calculator
.
When is the Feed-In Tariff available and for
how long?
The Feed-In Tariff was opened and payments
were made available on 1 April 2010. All systems that are
eligible under the scheme now qualify for receiving the tariff.
And the best news for anyone considering installing solar PV
panels is that the tariff will be available for the longest
period of time with this technology. Solar PV tariffs are paid
for 25 years, while most of the remaining technologies will only
benefit from 20 years of payments.
What limitations are there and am I
eligible?
Anyone who installs a renewable electricity
system with a capacity of five megawatts or less is eligible to
receive the Feed-In Tariff. The five megawatt system can be used
on a single property for a householder or business or used
collectively by a community.
Solar PV isn’t the only technology that
qualifies for the tariff – wind turbines, hydroelectricity,
anaerobic digestion and micro-combined heat and power systems
(Micro-CHP) all qualify too – but it is expected to be the most
popular renewable alternative in the UK.
The tariffs available and the process for
receiving them varies depending on when the technology was
installed and if you followed the guidelines of using an
installer certified under the Microgeneration Certificate Scheme
(MCS*).
To qualify for the full Feed-In Tariff
payments you must have either had the technology installed
between 15 July 2009 and 31 March 2010 and
transferred to Feed-In Tariff before April 2010 or have the
technology installed after 1 April 2010 using a certified
product and installer.
If you are eligible to receive the
Feed-In Tariff you will benefit in three different ways. Not
only will you receive a payment for the Generation tariff and
the Export tariff, you’ll also reap big savings on your energy
bills.
By generating the electricity yourself to
power your home appliances you do not have to buy all of your
electricity from an energy supplier. And the less electricity
you use, the more money you’ll make by exporting the generated
energy to the power grid.
Generation Tariffs
The generation tariff is a payment made by
the energy supplier for each kWh of electricity your
installation generates. This rate fluctuates with inflation and
will change each year for new entrants to the scheme (except for
the first two years), but once you join you will continue to
receive the tariff for 20 years, or 25 years in the case of
solar PV. The payment received depends on the size and type of
technology you’re using rather than being a set rate, and solar
PV is capable of producing the most profitable energy figures.
Export tariffs
The export tariff is a bonus payment for
every kWh of electricity you generate but don’t use and then
export to the electricity grid. The payment has a set ‘floor
price’ of 3p per kWh, which can be opted out of to negotiate a
new price with your energy supplier, that you export back and
the electricity supplier then delivers the electricity to
another customer. The tariff has been designed as an extra
incentive to encourage people that they will still receive money
for any surplus electricity they generate.
Who do I receive the payments
from?
The money you receive for both the Generation
and Export tariff DOESN’T come from the government – it is
actually paid by the energy suppliers. The suppliers pass on the
cost of the Feed-In Tariff to their electricity customers,
essentially making traditional energy consumers pay for your
self-generated electricity.
All the costs are spread equally across all
the energy companies but there is the option for smaller
suppliers to reject tariff customers.
Feed-In Tariff Rates Table
As mentioned previously, the rate of the
Generation tariff depends on the technology and the size of the
system you have installed. This is how the tariff breaks down
dependent on the technology and size.
| Energy Source |
Scale |
Generation Tariff
Rate (p/kWh)[*] |
Rate Duration (years) |
| Anaerobic digestion |
≤250kW |
14.0 |
20 |
| Anaerobic digestion |
>250kW – 500kW |
13.0 |
20 |
| Anaerobic digestion |
> 500kW |
9.4 |
20 |
| Hydro |
≤15 kW |
20.9 |
20 |
| Hydro |
>15 – 100kW |
18.7 |
20 |
| Hydro |
>100kW – 2MW |
11.5 |
20 |
| Hydro |
>2kW – 5MW |
4.7 |
20 |
| Micro-CHP[**] |
<2 kW |
10.5 |
10 |
| Solar PV |
≤4 kW new[***] |
37.8 |
25 |
| Solar PV |
≤4 kW retrofit[***] |
43.3 |
25 |
| Solar PV |
>4-10kW |
37.8 |
25 |
| Solar PV |
>10 – 50kW |
32.9 |
25 |
| Solar PV |
>50 – 150kW |
19.0 |
25 |
| Solar PV |
>150 – 250kW |
15.0 |
25 |
| Solar PV |
>250kW – 5MW |
8.5 |
25 |
| Solar PV |
Standalone[***] |
8.5 |
25 |
| Wind |
≤1.5kW |
36.2 |
20 |
| Wind |
>1.5 – 15kW |
28.0 |
20 |
| Wind |
>15 – 100kW |
25.3 |
20 |
| Wind |
>100 – 500kW |
19.7 |
20 |
| Wind |
>500kW – 1.5MW |
9.9 |
20 |
| Wind |
>1.5MW – 5MW |
4.7 |
20 |
| Existing generators
transferred from RO |
9.4 |
to 2027 |
|
Export tariff (p/kWh) |
|
All eligible
technologies
|
3.1 |
|
Notes:
[*]: Installations registered in FIT Year
2 (1st April 2011 – 31st march 2012). These tariffs are
index-linked for inflation. The Energy Regulator Ofgem will
publish the updated tariff levels.
[**]: This tariff is available only for
30,000 micro-CHP installations, subject to a review when 12,000
units have been installed.
[***]: These terms are defined as follows:
- ‘Retrofit’ means installed on a building
which is already occupied
- ‘New Build’ means where installed on a
new building before first occupation
- ‘Stand-alone’ means not attached to a
building and not wired to provide electricity to an occupied
building
Measuring the energy
Because the tariff payments based on the kWh
produced and exported, the energy generated needs to be
measured. Three different meters need to be installed to read
the three energy flows – generation, import and export.
You will already have an import meter which
is used to calculate your energy bills. Some of these are
capable of measuring export too, but this needs to be
investigated. A generation meter will be provided with whichever
MCS certified product you choose to have installed.
However, it’s worth remembering that Smart
Meters are soon to become universal and will be able to cope
will all of your meter reading requirements
