Feed-in Tariff
(Clean Energy Cashback) Scheme
Feed-in Tariffs (FITs) were launched from of 1st April 2010 in the UK. 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.
When you have installed a microgeneration technology you should see a monthly reduction in your electricity bill and you will then receive an income from your Feed-in tariff (clean energy cash back) provider.
About the Scheme
The scheme covers the following electricity-generating technologies, up to an installation size of 5 Mega Watts:
- Solar electricity (PV) (roof mounted or stand alone)
- Wind turbine (building mounted or free standing)
- Hydroelectricity
- Anaerobic digestion
- Micro combined heat and power (mCHP) (limited to a pilot at this stage)
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:
- The technology was installed between 15th July 2009 and 31st March 2010 and you transferred to FITs before 1st April; OR
- It is installed after 1st April 2010 using an MCS* certificated product and installer;
* The Microgeneration Certification Scheme (MCS) is an independent scheme that certificates microgeneration products under 50kW and installers in accordance with consistent standards. Any commercial or larger scale systems, over 50kW, and all anaerobic digestion installations must apply directly through the Renewables Obligation Order feed-in tariff process for larger installations (ROO-FIT) process as they are not covered by the MCS.
How the scheme works
If you are eligible to receive the FIT then you will benefit in three ways:
- 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 two 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).
- 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.
- 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, due to electricity companies preferring to estimate this figure instead of installing an import/export meter. If you feel you will export more than the 50% you should request for an import/export meter to be installed.
As an example, a typical domestic solar electricity system, with an installation size of 2kWp could generate 1802.64Kwh (units) a year (using the sap calculator), this means you could receive:
- £744.49 from the Generation Tariff (1802.64 x 41.3p)
- £27.03 per year from the Export Tariff (901.32 (50%) x 0.03p)
- £116.72 per year reduction in current electricity bills (901.32 (50%) x 12.95p (average unit price from the Energy Saving Trust))
This gives a total saving of around £888.24 per year.
This assumes 50% of the electricity generated is exported and import rate of electricity is 12.95p. The reduction in your electricity bills figure will vary if you have an import/export meter installed and will depend on how much is actually exported.
How to take advantage
Step 1:
Check that you have made all the basic energy efficiency changes to your home.
Step 2:
Decide which technology is most suitable for you and your home.
Step 3:
Install the technology using a MCS certified installer and products.
Step 4:
Once your system is installed inform your energy supplier and provide them with the FIT certificate which will have been provided by you installer.
Step 5:
Your energy provider will check that you are eligible for the tariff.
You will require an additional electricity meter to measure the electricity that your system is generating, and also to measure how much is being fed back into the electricity grid.
Once your chosen installer has installed your generating technology, they will register you on the central FIT database and you will then receive a certificate confirming FIT compliance. You must then inform your chosen energy supplier that you are eligible to receive the FIT by providing the certificate. The supplier will then cross reference your installation with the central FIT database. Payments will then be made by your energy supplier at intervals to be decided between you and your supplier. You may be required to provide meter readings to the suppliers if requested.
A list of the energy suppliers who can provide FITs can be found on the Ofgem website.
If you want to opt out of the guaranteed export tariff you must inform the supplier. You may want to do this if you chose to use a power purchase agreement. (This is a legal contract between you and your electricity provider.)
Tariff levels, for technologies installed between 15th July 2009 and 31st March 2012 of most significance to householders
| Technology | Scale | Tariff level (p/kWh) | Tariff lifetime (years) |
|---|---|---|---|
| Solar electricity (PV) | ≤4 kW (retro fit) | 41.3 | 25 |
| Solar electricity (PV) | ≤4 kW (new build) | 36.1 | 25 |
| Wind | ≤1.5 kW | 34.5 | 20 |
| Wind | >1.5 - 15 kW | 26.7 | 20 |
| Micro CHP | ≤2kW | 10.0 | 10 |
| Hydroelectricity | ≤15 kW | 19.9 | 20 |
Tariff levels vary depending on the scale of the installation.
The tariff levels shown in the table above apply to installations completed from 15th July 2009 to 31st March 2012 for the lifetime of the tariff. After this date, the rates decrease each year for new entrants into the scheme, in line with the retail price index.
All generation and export tariffs will be linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation.
What payments will you be eligible for, and how can you claim them?
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:
The following advice applies to domestic installations. If you have installed a qualifying electricity-generating system in a non-domestic property with a grant from the Low Carbon Buildings Programme, see the Low Carbon Buildings Programme website for further guidance.
Installed before July 15th 2009 and previously collected Renewables Obligation Certificate (ROCs) payments
- If you contacted Ofgem before 1st April 2010 to get your ROC transferred to the FIT then you will receive 9p/kWh for every unit generated plus 3p/kWh for every unit exported.
Installed before July 15th 2009 but not registered for Renewables Obligation Certificates
- If you didn't contact Ofgem by 31st March 2010 to apply for Renewables Obligation accreditation then you won't be eligible for FITs.
- If you did register with Ofgem by 31st March 2010 then you will receive the flat tariff of 9p/kWh for every unit generated plus 3p/kWh for every unit exported.
Installed between 15th July 2009 and 1st April 2010
- You will get full FIT payment if your installation is MCS certified (installer and product). You can apply after April 1st 2010 if you haven’t already.
- If your installation wasn’t MCS certified and you didn’t contact Ofgem by 31st March 2010 to apply for Renewables Obligation accreditation then you won’t be eligible for FITs
Installed after 1st April 2010. MCS certificated product and installer
- You are eligible for full generation tariff and export tariff.
- Contact your energy supplier, and send them your MCS certificate to tell them you are eligible to receive FITs.
- If you install after the 2nd year of the scheme your tariff could be reduced, depending on the installation size.
Installed after 1st April 2010. Non-MCS certificated product and installer
- Systems that are not MCS certificated will not be eligible to receive the FIT generation tariff or the guaranteed FIT export tariff. There is the possibility of receiving generation and export tariffs outside of the FIT scheme if privately negotiated.
- You will still benefit from lower electricity bills. The saving will depend on how much of the electricity you generate is used on-site.
Small Generators (50kW to 5MW) installed from 15th July 2009
- If you switched from Renewables Obligation Certificates (ROCs) to FITs before 1st April, then you will be eligible to receive the full generation tariff and export tariff.
All information from the Energy Saving Trust.
