Financial Incentives

Feed-In Tariffs

The 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:

1. 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
2. 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)
3. 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

Update - November 2011

DECC has announced a reduction to the feed in tariffs, see the press release and the consultation document here.

The proposed tariff rates, which may be effective as early as 12th December 2011, are as follows: