Feed in Tariff

Feed in Tariffs (FIT’s) became available in the UK on 1st April 2010. Under this scheme energy suppliers make regular payments to householders and organisations that generate their own electricity from renewable or low carbon sources such as solar PV or wind turbines. It guarantees a minimum payment for all electricity generated by the system, as well as a separate payment for the electricity exported to grid. These payments are in addition to any savings the system makes by using the electricity generated. Once micro generation technology has been installed, you should experience a monthly reduction in your energy costs. You will then receive an income from your Feed-in Tariff - clean energy cash back provider. The tariffs available and the process for receiving them vary, depending on when the technology was installed, and whether the system and the installer were certificated under the MCS* scheme.

Please refer to the chart below for the current Solar PV (FIT) rates.


How The Feed In Tariff Scheme Works
If you are eligible to receive the FITs then you will benefit in 3 ways:

Generation tariff – a set rate paid by the energy supplier for each unit (or kWh) of electricity you generate. This rate will change each year for new entrants to the scheme (except for the first 2 years), but once you join you will continue on the same tariff for 20 years, or 25 years in the case of solar electricity (PV).

Export tariff – you will receive a further 3.1per kWh from your energy supplier for each unit you export back to the electricity grid that is when it isn’t used on site. The export rate is the same for all technologies.

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.

Deemed export-
Domestic FIT’s installations are likely to have their export deemed (estimated) at 50% in most cases until smart meters are rolled out. The FIT’s pays out 21p for every kilowatt-hour produced. For the average house this equates to approximately £500 per annum which is tax free. This payment is guaranteed for 25 years and is indexed linked. Therefore the total FIT’s payment for an average house accrued over that period could be upwards of £12,500.   It's worth repeating again FIT’s payments are guaranteed by the Government for 25 years and are tax free and index linked. Savings can be considerable - around 1 tonne of CO2 a year. A 2.2 kWp system can generate around 40% of a household's yearly electricity needs. If the system is eligible to receive the Feed In Tariff it could generate savings and income of around £400- £500 per year.