Feed in tariffs
Feed in tariffs, or FITS were introduced by the Government on 1 April 2010. The scheme provides financial incentives for organisations, businesses, communities and individuals to install electricity-generating technologies such as solar electricity panels and wind turbines.
What are the incentives for the scheme?
Which technologies does it cover?
- Solar electricity (PV) - roof mounted or stand alone
- Wind turbines - building mounted or free standing
- Small scale hydroelectricity
- Anaerobic digestion
The government is also hoping to introduce a Renewable Heat Incentive in April 2011 which will cover air and ground source heat pumps, biomass boilers, solar thermal water heaters and combined heat and power (CHP) plants which use renewable fuels.
The Generation Tariff
You will earn a fixed amount for every kilowatt hour of electricity you generate and use in your property, which could be up to 41.3p/kWh depending on the type and size of technology installed.
The tariffs are paid by the energy suppliers and the rates will change each year for new entrants to the scheme (except for the first two years) but once you join you will continue on the same tariff for 20 years, or 25 years if you install solar electricity (PV). The tariffs will help to cover the initial costs of installing the technology.
The Export Tariff
You will also earn an additional 3p/kWh for every kilowatt hour of electricity you generate and sell back to the grid. This means you get paid more for the energy you don't use than for that which you do, which encourages you to be more energy efficient.
It will be easier to monitor how much you are generating once you have a Smart Meter installed, until then the export element will be estimated to be 50 per cent of the power generated by the system. Generators who believe their exports are substantially higher than this will be allowed to install suitable export meters and be paid on the metered level of exports.
Energy bill savings
You will be able to make savings on your electricity bills, because the electricity you generate will power your home and appliances so you won't have to buy as much from your energy supplier. The more energy efficient you can be at home the less energy you'll need to use, see the Energy Advice page to find ways of being more energy efficient.
What do I need to do?
Once you have installed your renewable technology you must inform your chosen energy supplier that you are eligible to receive the FIT. The supplier will then register your installation onto the Central FIT Register, which is administered by Ofgem.
You will require an additional electricity meter to measure the electricity that your system is generating, and also to measure how much is being fed back into the electricity grid. Payments will be made by your energy supplier at intervals to be decided between you and your supplier. You may be required to provide meter readings to the suppliers if requested.
What if I have more than one system?
Each type of renewable energy will be considered (and metered) separately because the generation tariffs are different for different types of technology.
Are there any restrictions?
The tariffs apply to all the technologies mentioned above in sizes up to five megawatts. There may be restrictions and procedures to follow if you installed your renewable technology before 1 April 2010. See the Energy Saving Trust website for more details of any restrictions or procedures.
Frequently asked questions
Can I still get a grant to help pay for my installation?
Grants for electricity-generating technologies under the Low Carbon Buildings Programme are now closed.
Will I be eligible if I have already received a grant?
Domestic installations which received a grant will still be eligible for the feed in tariff.
Will I be eligible to receive the tariff if I move into a home that already has an electricity generating technology?
If you move into a home with a renewable technology installed then the ownership transfers to the new owner and you will be eligible for the feed in tariff, you will need to register the change of ownership.
I rent my property. If my landlord installs an electricity generating technology, who would receive the FITs?
It will be up to landlords and tenants of domestic and commercial property to come to an arrangement about who receives the tariff payments.
Will I need a special meter to be able to claim FITs?
You will need a meter installing to read the amount of electricity being generated, used, imported and exported. Until Smart Meters are installed the amount of export will be estimated.
With the introduction of the Feed-In-Tariffs some companies are now offering to install solar panels on your roof for free. As solar Photovoltaics can be an expensive technology to purchase this can seem like an ideal offer for many. In exchange they would claim the annual payment from the FIT and any money from selling excess energy back to the grid. Typically you would get free electricity whilst the panels are working during the day so you will benefit from lower electricity bills.
There are things to consider before taking up this offer however, such as what happens if your roof needs repairs, how long is the contract for, what if you sell the house and the next owner doesn't want the panels. For more information and questions to consider before choosing this offer see the Energy Saving Trusts advice page.
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