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Feed-in Tariff

Clean Energy Cashback scheme

Feed-in Tariffs (FITs) will be introduced to Great Britain on 1st April 2010. The scheme requires energy suppliers to 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.

In February 2010 the government confirmed the rates available under the Feed-in Tariff for low carbon electricity. Feed-in Tariff policies have been very successful in other European countries at encouraging the installation of PV systems. Feed-in Tariffs offer a generous ongoing income to system owners, based on the output of the system. This additional income reduces payback times and creates opportunities for system owners to profit from the system.

In the UK, the Feed-in Tariff mandates payments to owners of PV systems from their electricity supplier. There are two components to the payment; the generation tariff, paid on the total generated, and the export tariff, paid on the amount of unused electricity that is exported to the grid.

The Feed-in Tariff offers different rates according to the size of the system. These are as follows;

System Size Generation Tariff Export tariff
<4kW (retrofit) 41.3p 3p
<4kW (retrofit) 36.1p 3p
4-10kW 36.1p 3p
10-100kW 31.4p 3p
100kW-5MW 29.3p 3p

 

About the scheme

The scheme covers the following electricity-generating technologies, up to 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; OR

- It is installed on or after 1st April 2010 using an MCS certificated product and by an MCS* certificated installer;

*The Microgeneration Certification Scheme (MCS) is an independent scheme that certificates microgeneration products under 50kW and installers in accordance with consistent standards. Any systems over 50kW and all anaerobic digestion installations must apply directly through the ROO-FIT process as they are not covered by the MCS. The installer is responsible for adding the details of the installation to the Microgeneration Certification Scheme (MCS) database. Once this has been done the MCS will send the system owner the MCS certificate directly. The owner's chosen supplier responsible for making tariff payments will need a copy of this certificate in order to complete the registration process and to start making payments.

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.

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

• £700 per year from the Generation Tariff

• £25 per year from the Export Tariff

• £110 per year reduction in current electricity bills.

This gives a total saving of around £830 per year. This assumes 50% of the electricity generated is exported, this figure will vary. See our Feed-in Tariff/Cashback Calculator to find out how much you could earn, and see the payback times - coming soon.

Taken from the article titled Feed-in Tariff (Clean Energy Cashback) from the energy saving trust website - click here for full article and how you could be part of the scheme