The Feed-in Tariff: how it works, what it pays and who is eligible for it

NB: Barring a few exceptions, the Feed-in Tariff scheme closed to new applicants on 1 April 2019. The information in this guide should be used for reference only.

What is the Feed-in Tariff?

The Feed-in Tariff scheme — often referred to as FiT — was introduced in 2010 to encourage UK households to invest in renewable energy generation methods such as solar panels.

With the Feed-in Tariff programme, those who generate their own green electricity (called "generators") are paid for doing so by selling it back to the grid via an energy supplier (called "licensees").

How does it work?

The FiT scheme works in three steps:

1. Generators install eligible technology such as solar panels in your home.
2. They use the electricity that is generated by their system, and sell back the excess energy to the grid via the licensee.
3. The licensee arranges the payments based on the rate arranged at the time of installation and the method of generation used.

What kind of technology is eligible for the Feed-in Tariff?

Only certain methods of electricity generation are eligible for FiT. Those include:

• Solar power (the most popular method under the scheme)
• Wind power
• Hydro
• Anaerobic digestion (plant and animal material is broken down by bacteria, which produces methane that can then be used to generate energy)
• Micro Combined Heat and Power (CHP) - this produces both heat and electricity from one process.

Can I switch my energy without losing my Feed-in Tariff?

Yes, you can switch your energy supplier even with a Feed-in Tariff without losing your payments or having the payment rate changed.

You can switch your household energy supplier to one that does not participate the Feed-in Tariff scheme, while keeping your FiT with your existing provider.

Which energy suppliers can I switch to with the Feed-in Tariff scheme?

You can switch to any energy supplier that is a Feed-In Tariff licensee.

There are two main types of licensed FiT supplier:

• Mandatory - All energy suppliers with over 250,000 customers must be part of the Feed-in Tariff scheme.
• Voluntary - All energy suppliers with fewer than 250,000 customers can apply to be part of the scheme. These are generally small energy suppliers that make green energy a focal point of their business model.

You can view the full list of licensed Feed-in Tariff suppliers here.

It's worth bearing in mind that switching energy suppliers will not change your Feed-in Tariff payment rate. These rates are set by the government, so changing energy suppliers will not impact your rate.

Why did the Feed-in Tariff scheme end?

The Feed-in Tariff for solar panels, or FIT for short, closed to new applications after 31 March 2019. Those who signed up to FIT before it closed will continue to get payments for the length of their agreement. Often 10-25 years, according to the government. 

The Feed-in Tariff was set to encourage many UK households to install solar panels at a time when they weren’t as popular. The scheme achieved its goal, with solar panels in domestic homes growing from around 7,000 at the start of the scheme (April 2010), to more than 900,000 when it closed (according to government data). 

The price of installing solar panels also dropped significantly as they became more popular. Meaning the scheme was no longer needed to encourage people to get them. The government closed FIT to new applicants to reduce costs and focus the budget on other sustainable initiatives. 

In January 2020, the government introduced the Smart Export Guarantee as a new way to reward those with solar panels. The scheme means large energy suppliers must pay eligible households for the surplus solar energy they send to the grid. 

SEG suppliers can set their own rates, and tariffs can be anything above zero. However, you can often shop around and find a good rate because there is competition between those offering payments. 

Unlike FIT, which included payments for generation and export, SEG only pays for electricity exported to the grid. As SEG tariffs are normally lower than the cost of buying electricity from the grid, this means it makes more financial sense to use the solar power you create when you can. However, if you do find you have surplus available, SEG is a great way to make some extra money if you aren’t signed up to FIT. 

How much does the Feed-in Tariff pay?

Your Feed-In Tariff for solar panels will depend on a number of factors, including how big your system is, its capacity and when you installed it. The FIT rates are set by Ofgem. Changes have been made to the scheme over the years, meaning different rates are offered for solar panels installed before or after 2012, and then 2016. 

On 1 April 2026, the government moved the FIT inflation indexation. In basic terms, this means they changed the way they decide how much to increase Feed-in Tariff rates each year. Payments are increased due to inflation (the prices of goods and services rise over time). However, there are different indices the government can choose to use to do this. 

Until now, FIT was based on the RPI (Retail Price Index), but it will now be based on the CPI (Consumer Price Index). Historically, RPI has been higher, meaning solar energy Feed-in Tariff rates are likely to rise by less each year than the CPI index. At the time of the change, Ofgem explained that: “The RPI is currently 4.2% and CPI is currently 3.4%.”

The government said that it made this move to save “approximately £600m” over the next decade, based on 2024/2025 prices. It added that this change was “part of a wider package of measures aimed at bearing down on the costs of electricity”. 

The short answer is: How much your FIT tariff pays depends on the rate you’re on. Following the 2026 changes, it will still increase every April; it’s likely to increase by a little less than it would if based on the RPI. The savings for the government from the changes will be put towards other initiatives to reduce the cost of your grid energy bills. 

Generation tariff vs. export tariff

Not sure what the differences are between generation and export tariffs? Under FIT, you’re paid for both, while SEG only pays an export tariff. Here’s a simple explanation of each:

• Generation tariff: Generation payments are based on the electricity your system generates, whether you use it at home or send it to the grid. You’re paid for every unit of electricity (kWh) your solar panels produce, no matter what you do with it. 
• Export tariff: The solar energy Feed-in Tariff also gives you an additional payment for the electricity you don't use and send to the grid. This is your export tariff.

It’s also important to understand how FIT export payments can be deemed or metered:

• Deemed export tariffs: This is where you don’t have a smart meter. They “deem” or estimate that you export 50% of the power your solar panels create and pay you for this. 
• Metered export tariffs: If you have a smart meter, your export payments will be based on the actual amount you send to the grid. 

While you don’t normally have to have a smart meter with Feed-in Tariff rates, you must have one to sign up for the Smart Export Guarantee. SEG doesn’t offer deemed export tariffs. 

How often are FIT payments made?

Solar power Feed-in Tariff payments are commonly made quarterly, but this will vary by supplier. You’re usually asked to submit meter readings by a certain date in order to be paid for that period. 

Typically triggered by meter readings, if you miss a reading deadline or verification request, your FIT payment may be delayed until your provider has the information it needs. It’s important to read your Feed-in Tariff rate agreement thoroughly, as rules and processes can vary between suppliers. 

Can I move from FIT to SEG? 

You can choose to move entirely from the solar power Feed-in Tariff to the Smart Export Guarantee; however, you’ll then miss out on generation payments. Remember, FIT pays for both generation and export, while SEG is export-only. 

If you would prefer a SEG rate for your export payments, under certain circumstances, you can choose to move those to SEG while keeping your generation payments with FIT. Current SEG rates in 2026 tend to be higher, you should bear in mind that:

• SEG rates are market-driven and set for your contract term, normally 12 months. Rates could be significantly lower when you go to renew. Your FIT payment agreement is set for up to 25 years, rising yearly with inflation. 
• If you don’t have a smart meter, you’ll need to get one for SEG payments. If you have a “deemed” or estimated Feed-in Tariff export rate, you won’t be able to go back to this once you have a smart meter. 
• You can change between FIT and SEG and back again. You can only opt in or out of FIT export payments once a year. 
• You must choose one scheme for your export payments. You can’t be paid by both SEG and the Feed-in Tariff for the same energy you’re sending to the grid.

Will switching suppliers affect my FIT? 

This depends on what you’re switching suppliers for:

• Switching energy suppliers for the power you get from the grid: Switching energy suppliers should not cause issues with your Feed-in Tariff rate payments. They are separate, and you’re able to use two different suppliers for these. However, you should speak to your supplier and read any agreements to double-check. 
• Switching FIT suppliers: As your FIT rate will be set by Ofgem, there’s no point in moving supplier to try and find a better Feed-in tariff rate. Every supplier will have to offer you the same one. You might move your FIT supplier for another reason. For instance, if you currently have different suppliers for FIT payments and getting energy from the grid and want to bring them together. 
• Switching export payments from FIT to SEG: You can choose to opt out of FIT export payments and choose to be paid for sending energy to the grid via SEG instead. These rates are market-driven, and there’s competition between suppliers, so you’re more likely to find a good rate. However, there are some important factors to consider before moving from FIT to SEG export payments.