Feed in Tariffs

Clean Energy Cash Back Scheme

Feed-in Tariffs (FITs) became available in Great Britain from of 1st April 2010. Under this scheme energy suppliers make regular payments to householders and communities who generate their own electricity from renewable or low carbon sources such as solar electricity (PV) panels or wind turbines.

The scheme guarantees a minimum payment for all electricity generated by the system, as well as a separate payment for the electricity exported to grid. These payments are in addition to the bill savings made by using the electricity generated on-site.

Once you have a microgeneration technology installed you should experience a monthly reduction in your electricity bill and then receive an income from your Feed-in tariff (clean energy cash back) provider. However, if you have taken out a loan to pay for the installation you will have to make monthly repayments to your loan company. Feed-in tariffs are designed so that the average monthly income from your installation will be significantly greater than your monthly loan repayment (with a 25 year loan).

About the Scheme

The scheme covers the following electricity-generating technologies, up to an installation size of 5 Mega Watts:

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. See below for further details

You will qualify for the full FIT payments if:

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. The amount you save will vary depending how much of the electricity you use on site.

Deemed export

Domestic FIT installations are likely to have their export deemed (estimated) at 50% in most cases until smart meters are rolled out.

Example of how the Feed-in Tariff works

 

As an example, a typical domestic solar electricity system, with an installation size of 2 kWp could earn around

This gives a total saving of around £830 per year.

This assumes 50% of the electricity generated is exported. The figure will vary depending on how much is exported.

Renewable Energy Heat Scheme

To meet our 2020 15% renewable energy target, we need to develop new ways of generating renewable energy in all sectors, including heat. Heat generated from renewable sources accounts for approximately 1% of total heat demand – this may need to rise to 12% to hit our binding EU targets.
We will not be able to expand renewable heat without some form of financial assistance because other forms of heat are currently cheaper. Such support will enable more people to afford renewable heat and, by expanding the market, help bring costs down more quickly.

Common examples of renewable heat technologies include: air- and ground-source heat pumps, biomass boilers, solar-thermal water heaters and combined heat and power (CHP) plants which use renewable fuels.

Powers in the Energy Act 2008 allow the setting up of a Renewable Heat Incentive (RHI). Our aim is to make the RHI as accessible, flexible and user-friendly as possible to potential investors in renewable heat at all scales. We are working to have the RHI in place for April 2011.