Financial Incentives
UK Feed-In Tariffs
The UK Feed-in Tariffs (FITs) scheme was introduced by the government on 1 April 2010, to encourage deployment of additional small-scale (less than 5MW) low-carbon electricity generation, particularly by organisations, businesses, communities and individuals that have not traditionally engaged in the electricity market. This will allow many people to invest in solar power generation schemes in return for a guaranteed payment from an electricity supplier of their choice for the electricity they generate and use as well as a guaranteed payment for unused surplus electricity they export back to the grid.
What are the benefits of FITs?
There are three financial benefits from FITs:
- Generation tariff – the electricity supplier of your choice will pay you for each unit (kilowatt) of electricity you generate. A table of tariffs has been published by government
- Export tariff – if you generate electricity that you don’t use yourself, you can export it back to the grid. You will be paid for exporting electricity as an additional payment (on top of the generation tariff)
- Energy bill savings – you won’t have to import as much electricity from your supplier because a proportion of what you use you will have generated yourself
Latest developments
On 24th June, the Government announced the latest proposed changes to the scheme, were effective from 1st November 2012 as follows:
The Tariff payments are for all output from the PV installation. They are set for each project at the date of commissioning, guaranteed for 20 years, and are increased annually by RPI.
Lower rates are applicable where any building supplied does not have an A-D band EPC certificate, or where the owner of the installation has more than 25 FIT schemes registered.
Tariff rates will be reviewed by the Government each quarter, with the intention of making further cuts to the tariffs depending on the level of uptake (so the higher the uptake the more likelihood of cuts). Any planned cuts will be announced at least two months in advance.
Additionally, for power which is not used on site, but which goes back into the grid, there is an Export Tariff which is currently 4.5p/kWh.
To qualify for the Feed-in-Tariff your system must be installed by a Microgeneration Certification Scheme (MCS) approved installer and your home must also have an Energy Performance Certificate (EPC).
For an independent overview of the scheme, please check the Energy Saving Trust page on the Feed-In Tariffs.
