Feed-In Tariffs were introduced on 1 April 2010 and replaced UK government grants as the main financial incentive to encourage uptake of renewable electricity-generating technologies. Most domestic technologies qualify for the scheme, including:
- solar electricity (PV) (roof mounted or stand alone)
- wind turbines (building mounted or free standing)
If you install an electricity-generating technology from a renewable or low-carbon source such as solar PV or wind turbine, the UK Government's Feed-In Tariffs scheme (FITs) could mean that you get money from your energy supplier.
You can be paid for the electricity you generate, even if you use it yourself, and for any surplus electricity you export to the grid. Plus, you'll also save money on your electricity bill, because you'll be using your own electricity.
The UK Government's Department for Energy and Climate Change (DECC) makes the key decisions on FITs in terms of government policy. The energy regulator OFGEM administers the scheme.
Your energy supplier will make the FITs payments to you. For you to qualify for FITs, the installer (Life's Energy) and the products you use must both be certified under the Microgeneration Certification Scheme (MCS). The tariffs you receive depend on both the eligibility date and, for solar PV, your property’s Energy Performance Certificate (EPC) rating.
Eligibility dates for Feed in Tariff
The date from which an installation becomes eligible for FITs payments is the date your FIT supplier receives a valid application for FITs. You will only be paid for what you generate based on the meter reading on the eligibility date. This is likely to be a later date than when the system was commissioned so units generated before the eligibility date may not be paid. You should check this with your FIT licensee before system is commissioned. And once your system has been installed be sure to get your paperwork submitted promptly.
How FITs work
See image from Energy Saving Trust website
- Electricity is generated by the solar panels on your roof. Your electricity supplier pays you a Feed in Tariff for EVERY unit of electricity you produce.
- You can use the electricity you generate - which means you don not have to import any from the National Grid.
- Any electricity you don't use gets sold back to the grid for an Export Tariff
- You import electricity from the grid, in the usual way if you need more than your panels are generating.
You will benefit in three ways:
(1) Feed-in tariff:
- your energy supplier will pay you a set rate for each unit (or kWh) of electricity you generate. Once your system has been registered, the tariff levels are guaranteed for the period of the tariff (up to 20 years) and are index-linked.
(2) Export tariff:
- you will get a further rate from your energy supplier for each unit you export back to the electricity grid, so you can sell any electricity you generate but don't use yourself. This rate is the same for all technologies. At some stage smart meters will be installed to measure what you export, but until then it is estimated as being 50% of the electricity you generate (only systems above 30kWp need to have an export meter fitted, and a domestic system is unlikely to be that big).
(3) Energy bill savings:
- you will be making savings on your electricity bills because generating electricity to power your appliances means you don’t have to buy as much electricity from your energy supplier. The amount you save will vary depending how much of the electricity you use on site.
Once you are receiving Feed-In Tariffs, the rate you get will increase in line with inflation in accordance with the Retail Price Index (RPI). For the full list of tariff rates visit the OFGEM web site.
Feed In Tariff Rates for Solar PV:
- Evidence of property’s EPC rating will be required when applying for FITs. If no evidence showing the EPC has a band D or higher, then the lower rate will apply
- The export tariff for solar PV is currently 4.85p/kWh
- The tariff period (lifetime) is now 20 years
- The tariffs are to be reviewed every three months and will be revised according to deployment rates
For a site-specific calculation and bespoke report showing how much you could earn through feed-in tariffs for solar PV, use the energy saving trust Solar Energy Calculator.