A feed-in tariff is a government policy designed to encourage investment in renewable energy technologies.
This generally entails offering small-scale producers of energy — such as solar or wind power—an above-market price for what they supply to the grid.
The feed-in tariff (FIT) pays up to £80,000 per year to homeowners who generate renewable energy, such as solar photovoltaic (PV) panels. In March 2019, it stopped accepting new UK applicants.
Understanding Feed-In Tariffs (FITs)
Feed-in tariffs are commonly utilized to assist promote renewable energy, particularly in the early phases of its development, when manufacturing may be difficult. Feed-in tariffs generally entail long-term contracts and prices linked to the production cost of the energy.
Long-term contracts and guaranteed prices protect producers from some of the risks associated with renewable energy production, encouraging investment and growth that may not otherwise occur.
Feed-In Tariffs and Small Energy Producers
Anyone who generates green power is eligible for a feed-in tariff, but those who use it are frequently not commercial energy producers. Homeowners, company owners, farmers, and private investors are all examples of people who may take advantage of FITs. FITs generally come with three criteria.
- Consumers have the option to go with a different provider. They ensure grid access, which means energy producers will be able to access the grid.
- They typically require 15 to 25 years of service, and they provide long-term contracts.
- They provide assured, cost-based purchase prices, which means energy producers are paid in proportion to the resources and money invested in producing it.
Feed-in tariff rates and earnings
If you’re already receiving the feed-in tariff, your income is determined by: the FIT rates you agreed to when purchasing the technology you installed how much power your system generates how much of your energy consumption.
Those who joined up to the feed-in tariff when it first opened in 2011 were paid a significantly higher rate than those who signed up shortly before it ended.
What happens to my solar panels if the feed-in tariff is discontinued?
If you’re already receiving the feed-in tariff, you’ll continue to do so. The program has now closed to new applicants, but those who have already signed up will continue to receive payments for the rest of their contracts.
Is it possible to get compensated for producing clean energy?
The good news is, that you can still get paid for the energy you produce. The Smart Export Guarantee (SEG) is the new scheme that will compensate houses for the surplus renewable energy they produce and feed into the grid.
All firms with more than 150,000 consumers must provide an SEG plan by the end of 2019, however very few have done so.
The SEG is distinct from the FIT in a number of significant ways:
- Payments will be made based on energy exports that have been measured, rather than ‘deemed’ for FIT payments.
- The rates of SEG tariffs are set by the businesses themselves.
- Feed-in tariff rates were set by the government. It’s likely that to receive an SEG tariff, you’ll need a smart meter or another device that can measure half-hourly export.
Find out more about the Smart Export Guarantee, including which firms provide it and how much money you could make.
Is it possible for me to take my feed-in tariff with me if I move house?
If you relocate, the renewable technology will most likely pass to your new home’s owners. As a result, they would be eligible for the feed-in tariff. On the day of the relocation, you or someone on your behalf must notify the energy firm.
Is it possible to switch from one feed-in tariff provider to another?
Regardless of which electricity firm pays your feed-in tariff charges, they will always be the same. This is because government-mandated rates have been set.
You don’t need to pick the same energy provider as your feed-in license holder, nor do you have to use the same electricity company as your domestic supplier.
You may change your FIT license if you like. The feed-in tariff was required for all electricity companies with more than 250,000 consumers.
These are Avro Energy, British Gas, Bulb, Co-operative Energy, EDF Energy, Eon, Flow Energy, Npower, Octopus Energy, Ovo Energy, Scottish Power, Shell Energy, SSE, Utility Warehouse, and Utilita.
Smaller businesses also opted to pay the feed-in tariff. These include Bristol Energy, Ecotricity, Engie, Foxglove Energy, Good Energy, Green Energy UK, iSupply Energy, Robin Hood Energy, and Tonik Energy.
Can I get the feed-in tariff in Northern Ireland?
In Northern Ireland, the feed-in tariff was not available. Instead, there was a program called NIRO (Northern Ireland Renewable Obligation) that allowed residents to apply for subsidies if they installed solar panels.
This scheme has now closed to new installations as well. You will continue to receive Renewable Obligation Certificates (ROCs) for either 20 years from the accreditation date of your system or until 31 March 2027, whichever is sooner.