The Feed-in Tariff

Use this guide to find out everything you need to know about the Feed-in Tariff.

The Feed-in Tariff scheme (also known as FITs or the Clean Energy Cashback scheme) means that people who generate their own green or renewable energy will be paid for doing so.

It's a new government initiative which is hoped will encourage more people to start generating their own power.

Feed-in Tariffs are already popular across Europe - in the Netherlands, for example, 40% of its electricity is generated through similar schemes.

Currently, the UK only gets about 5.5% of its electricity from renewable sources and the Feed-in Tariff scheme could help to increase this percentage.

 

 

1. You install solar panels or a wind turbine etc and start generating your own renewable energy.
2. You use the 'free' electricity you generate in your home, get paid for every unit you generate and buy any extra energy you need from your energy supplier.
3. You sell any extra electricity you're producing to the National Grid.

The amount you get paid for the electricity you generate will depend on what energy source you are using.

To try and get as many households as possible to join in, the government will pay a higher long term tariff rate to people who install their solar panels etc in the first year of the scheme (1st April 2010 - 31st March 2011) than for those installed later on.

Tariffs are index-linked which means they will track market prices and, depending on the type of technology you use to generate electricity, this is guaranteed for up to 25 years.

Yes. As well as cutting your electricity bills, you can earn a significant amount of money from the energy you generate. For example:

• An average household uses around 4,500kWh of electricity a year, costing about £585.
• A system with 12 solar panels will generate 2960kWhs of electricity per year. This means that the average household will use 37.5% of the electricity the panels generate.
• The average household will use 1110kWh of electricity from their panels, meaning they buy 33.64% less electricity and make a saving of £176.93.
• By signing up to the Feed-in Tariff, you will earn 21p for every unit of electricity generated (£621.60), plus 0.03p for every unit sold back to the Grid (£55.50p) meaning total Feed-in tariff earnings of £677.10.
• By adding together the savings on electricity and the earnings on the Feed-in tariff, you get a total saving of £854.03.
• Over the 25 year lifetime of the solar panels, this means total income of £21,350.68.

• Wind power
• Solar or photo voltaic power
• Hydro Anaerobic digestion - plant and animal material is broken down by bacteria, which produces methane, which can then be used to generate energy.
• Domestic Micro Combined Heat and Power (CHP) - this produces both heat and electricity from one process, and it a more efficient way of using both fossil and renewable fuels.

Yes. The Feed-in Tariff scheme doesn't just apply to new installations. If you've installed a way of harvesting one of the kinds of renewable energy listed above since July 2009, you can join the scheme.

If you started generating your own electricity before July 2009, you can also be part of the scheme, but at a lower tariff rate.

The generation of renewable heat through things like ground source heat pumps, biomass boilers and air source heat pumps is not covered by the Feed-in Tariff scheme.

However, the DECC (Department of Energy and Climate Change) has announced that from April 2011, there will be incentives for renewable heat generation.

On the 31st October 2011, the government announced significant changes to the rates customers can earn from the Feed-in Tariff depending on when they are installed. This rates took effect from the 12th of December. The changes mean:

• Solar panels installed by the 12th December 2011 will be on a FiT  rate of 43.4p per kWh for the next 25 years.
• Solar panels installed between 12th December 2011 and 1st April 2012 will be on the FiT rate of 43.4p per kWh until 1 April when the rate drops to 21p per kWh.
• If your solar panels are not fully installed until after 1st April 2012, you are only eligible for the 21p per kWh rate.

• Ofgem: an article with more information about Feed-In Tariffs
• Microgeneration Certification Scheme (MCS): an independent scheme that certifies microgeneration products and installers. Any solar panels, wind turbines etc that you want to use for the Feed-In Tariff Scheme will have to be approved by the MCS and installed by a MCS-approved engineer.
• For more information about getting involved in the Feed-In Tariff Scheme, you can also speak to your energy supplier.

Find out about other energy-saving grants and schemes.