Feed in tariff and green energy

The Feed-in Tariff

The Feed-in Tariff is the government scheme that pays households with renewable energy generation such as solar panels

Doing your bit for the environment isn't usually cost effective, but anyone looking to generate their own green energy faces even bigger challenges with the significant upfront costs of solar panels, wind turbines and ground-source heat.

Luckily, a government scheme that pays you for the energy you generate – the Feed-in Tariffs scheme – has made the whole enterprise more affordable, making domestic green energy production a realistic target for households across the UK.

Feed-in Tariffs (FiTs) were introduced in 2010, and requires eligibility. So, who decides the rates and eligibility, and how does the scheme work?

What is the Feed-in Tariff scheme?

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.

According to the Energy Saving Trust, to qualify for the Feed-in Tariff, you must:

  • Have used an installer and products certified by the Microgeneration Certification Scheme
  • Have an Energy Performance Certificate rating of D or higher

For more information on FiTs rates and to download tables, visit Ofgem's environmental programmes site.

Feed-in Tariffs are already popular across Europe - in the Netherlands, for example, 40% of electricity is generated through similar schemes. Currently, the UK only gets about 9.4% of its electricity from renewable sources and the Feed-in Tariff scheme could help to increase this percentage, whilst allowing Brits to get paid for generating energy.

How does the Feed-in Tariff work?

 

How the feed in tariff worksHow the Feed-in Tariff works

  1. You install solar panels or a wind turbine 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're using and what rate you are offered, which in turn depends on how much you generate, when you agree your Feed-in Tariff deal, and where you live.

Tariffs are index-linked, which means they will track market prices and, depending on the type of technology you use to generate electricity, they're guaranteed for up to 20 years.

What sources of renewable energy generation does the scheme cover?

  • Wind power

  • Solar or photo voltaic power

  • Hydro Anaerobic digestion - plant and animal material is broken down by bacteria, which produces methane that 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's a more efficient way of using both fossil and renewable fuels.

The graphs below from Ofgem shows the total number of installations by technology type between April 2010 and March 2012:

renewable installations by technology type

Which energy supplier buys the energy I produce?

Typically, any excess energy you produce will be sold to your current energy supplier. You can ask to change the energy provider, however, rates are set by Ofgem so all suppliers pay the same.

This means that British Gas Feed-in Tariff rates are identical to those offered by ScottishPower, for example.

If you've already got a solar panel/wind turbine, can you be part of the scheme?

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.

What about renewable heat generation - is that covered?

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, there is a similar programme called the Renewable Heat Incentive.

I want to switch suppliers, do I have to switch my Feed-in Tariff too?

No. You can continue to receive your payment from your existing energy supplier when you switch energy provider.

More information about Feed-in Tariffs

  • Microgeneration Certification Scheme (MCS): an independent scheme that certifies microgeneration products and installers. Any solar panels, wind turbines 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.

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