The UK Feed In Tariff Scheme

UK Feed in Tariff Scheme (FITs) pays households, businesses and institutions to produce electricity from a green energy source. So businesses, charities, landlords, homeowners and even schools can receive monetary compensation for producing green energy.

What method of generating energy are included in the Feed in Tariff scheme?

The most common form of generating green energy would be through solar panels and wind turbines. The Energy Savings Trust include the following technologies as eligible for the Feed in Tariff scheme;

• Photovoltaic panels (Solar power)
• Wind turbines
• Hydroelectricity
• Anaerobic digester (natural breakdown of waste which produces methane).
• Micro-CHP (system of generating heat and electricity simultaneously)

As stated above, individuals and/or organisations can take part in the scheme with the condition, that the energy produced must not be greater than 5MW. It’s unlikely that small businesses or homes would produce anywhere near that limit which means that most properties would be eligible for FITs. Another condition for eligibility is the solar panels or wind turbines are installed post July 2009.

How do Feed in Tariff work?

The payment for Feed in Tariffs to those producing green energy are made by energy suppliers. The Larger energy suppliers (particularly the big six) are compelled by law to participate in the scheme. Smaller suppliers can voluntarily participate in the scheme. To see the full list of suppliers participating in FIT click here

What are the payment details?

The great thing about the FITs is that payment is made on every unit (kWh) of energy generated. So even if this energy is consumed by the household a payment is still made. The rates of payment are indexed linked, guaranteed, assured for up to 20 years and are labelled as Generation Tariff.

What happens to excess energy generated?

Excess energy generated can be sold back to the grid, which is on top of the Generation tariff and is labelled as Export Tariff. The Export Tariff is currently paid at a flat rate of 4.77 p/kwh regardless of technology.

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Written by

Shay Ramani

Founder and Managing Director at Free Price Compare

Expert in Cost Saving and Financial Solutions