The Feed-In Tariff (FIT) was introduced from April 2010. The scheme seeks to support small scale domestic renewable technology installations by paying householders for the electricity generated by their renewable installation. Payments are made to householders through their electricity supplier once they have received their FIT Certificate from the installer and registered with their supplier.
Three benefits result from these small scale renewable installations:
- A Generation Tariff: householders are paid a set rate for each unit of electricity generated for 20 years, or 25 years in the case of solar photovoltaics, whether or not the installation is capable of exporting electricity to the national grid (new meters installed with the technology will monitor generation and use).
- An Export Tariff: householders will receive a further 3 pence per kilowatt hour of electricity exported back to the national electricity grid, where the installation is capable of doing so (until smart meters are fully rolled out and capable of measuring export it will be deemed as 50% of total generation).
- Energy Bill Savings: whilst generating and using electricity the householder is reducing their need to buy electricity from their supplier.
There are several restrictions on eligibility for the FIT and the tariff will also vary according to when and how the technology was installed. For more information, see the DECC website
. To calculate how much a particular installation could provide through FITs, the Energy Saving Trust provides a handy online calculator tool and Ofgem provides detailed guidance, including a list of suppliers which can offer FITs.
2011-12 changes to FITs
The Department for Energy and Climate Change announced a revision to the FIT rates for new solar photovoltaic (PV) installations above 50kW and all stand-alone installations from August 2011. Stand-alone installations are those arrays which supply electricity to the grid but use little, if any, on-site, widely known as solar farms.
The new lower rates for affected installations will only apply to those approved after August 2011. The new rates are the result of a fast-track review undertaken in March 2011 in response to the unprecedented numbers of schemes applying for the FIT - since the scheme started in April 2010, over 40,000 installations have registered.
At the end of 2011, the UK Government consulted on proposals for the tariff levels available for renewable electricity generation from solar PV installations of 250kW or below under the FITs scheme. After a legal challenge and subsequent appeals, the Supreme Court rejected the UK Government’s defence, so those who applied to receive FITs for solar PV between 12 December 2011-2 March 2012 will receive 43.3p/kWh for the duration of the tariff (25 years).
Households installing solar PV panels between 3-31 March 2012 will receive 43.3p/kWh over that period only and then 21p/kWh from 1 April 2012 onwards. Any installation completed between 1 April-1 July 2012 will receive 21p/kWh provided the property has an EPC Band D or above. The rate will be 9p/kWh if the property is not an EPC band D on the date the application for FITs is made.
The UK Government is currently consulting on proposals for a programme of six monthly degression for solar PV tariffs, with an added deployment trigger to ensure that subsidy levels keep in step with the market. Alongside this, an additional consultation was launched on tariffs for FIT technologies other than PV, and other scheme administration issues. This includes proposals to carve out special arrangements for community projects, including greater tariff stability, an increase in the rate of return available for micro-combined heat and power, and potential tariff guarantees for wind, anaerobic digestion and hydro projects.
For more information on the new FIT levels, see the DECC website.