How the Feed-in Tariff Works
You can now get paid for going 'Green'!
The Feed-in Tariffs (FITs) were introduced to Great Britain on 1st April 2010. The scheme requires energy suppliers to make regular payments to householders and communities who generate their own electricity from renewable energy systems.
The scheme guarantees a minimum payment for every kilowatt hour of electricity generated by the system, as well as a separate payment for every kilowatt hour of electricity exported back to the National Grid. These payments are in addition to the bill savings made by using the electricity generated on-site!
About the Scheme
The scheme covers the following electricity-generating technologies, up to 5 Mega Watts:
- Solar electricity (PV) (roof mounted or stand alone)
- Wind turbine (building mounted or free standing)
- Hydroelectricity
- Anaerobic digestion
- Micro combined heat and power (mCHP) (limited to a pilot at this stage)
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.
You will qualify for the full FIT payments if:
- The technology was installed between 15th July 2009 and 31st March 2010; OR
- It is installed on or after 1st April 2010 using an MCS certificated product and by an MCS* certificated installer;
How the scheme works
If you are eligible to receive the FIT then you will benefit in 3 ways:
1. 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).
2. Export tariff - you will receive a further 3p/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.
3. 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.
Example of monetary benefits:
As an example, a 15kW Wind Turbine system at an average windspeed of 6m/s could produce over 40,000kwh per annum.
An average 4 bedroom home uses 5,000-7,000kwh of electricity per annum, leaving roughly 35,000kwh to be exported.
You could receive:
26.7p per kwh from the Feed in Tariff = £10,680 p.a.
3p per kwh that is exported = £1,050 p.a.
This gives a total income of nearly £12,000 per annum.
and dont forget you have the savings on your energy bill as well!
Tariff levels*
Technology |
Scale |
Tariff level (p/kWh) |
Tariff lifetime (years) |
Solar electricity (PV) |
≤4 kW (retro fit) |
41.3 |
25 |
Solar electricity (PV) |
≤4 kW (new build) |
36.1 |
25 |
Wind |
≤1.5 kW |
34.5 |
20 |
Wind |
>1.5 - 15 kW |
26.7 |
20 |
Micro CHP |
≤2kW |
10.0 |
10 |
Hydroelectricity |
≤15 kW |
19.9 |
20 |
Tariff levels vary depending on the scale of the installation.
All generation and export tariffs will be linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation.
*source: Icon Energy