What is the Feed in Tariff scheme?
The Feed in Tariff (FiT) scheme was launched by the Government in 2010 as a way to encourage the uptake of renewable electricity-generating technology, such as solar PV (photovoltaic) panels. While we might all wish to live a little ‘greener’, the cost of installing electricity-generating renewable technology can be prohibitive, so the scheme was introduced to help pay homeowners back for the capital cost.
Once properly set up, homeowners who join the scheme can expect to be reimbursed for the renewable electricity they generate.
Unlike the Renewable Heat Incentive (a similar scheme for those generating heat from renewables) which only offers payments for seven years from installation, you will be entitled to 20 years of payments under the Feed in Tariff scheme (or 10 years for combined heat and power systems). As a result, most people on the Feed in Tariff scheme will see the outlay for their renewables covered, and many will make a profit.
What renewable electricity sources qualify for the scheme?
The scheme covers the following technologies:
- Solar photovoltaic (PV) panels
- Wind turbines
- Hydroelectric power generation
- Combined heat and power (up to a capacity of 2kW)
- Anaerobic digestion systems
To qualify, the technology must be issued with a certificate from the Microgeneration Certified Scheme (MCS). If installed by a registered supplier, this shouldn’t be an issue, but do check that the installer will be able to supply a valid certificate.
- Find out more about renewable electricity in our Guide to Renewables
How does the Feed in Tariff scheme work?
After applying to be part of the scheme, you will then be paid quarterly for the electricity you have generated. This will be measured when you submit electricity meter readings to your energy supplier (who is known as an FiT licensee under the scheme). To do so, you need to use an energy supplier who is part of the scheme.
In theory, the payments should be calculated from the date that you register, but there is a cap on the number of new installations that can be supported by the scheme, meaning you may be put in a FiT queue.
Beware of companies, usually dealing in solar PV, who will install panels on your roof for free allowing you to get ‘free’ electricity. They do this to register the installation and receive FiT payments for an array on your roof.
While it may sound appealing to have clean electricity at no cost, leasing your roofspace in this way can affect your mortgage agreement.
How much could I earn on the scheme?
Once installed and accredited, a tariff will be allocated to your installation. The tariff is based on the technology you have chosen, the total installed capacity of that installation (how much energy it is capable of producing), when you register (the tariffs are updated quarterly) and where you sit in relation to the deployment caps mentioned above.
This table shows current tariffs. These are updated every quarter.
|Description||Total Installed Capacity (kW)||Tariff (p/kWh)|
|Standard Solar photovoltaic receiving the higher rate||0-10||4.14|
|Standard solar photovoltaic receiving the middle rate||0-10||3.73|
|Standard solar photovoltaic receiving the lower rate||0-10||0.48|
|Standard large solar photovoltaic||250-1000||1.63|
|Stand-alone solar photovoltaic||0-5000||0.35|
|Combined Heat and Power||0-2||13.95|
Estimated Payback Time for a Standard Solar Array
Experts suggest that a 4kW solar array will serve a three-bed family home for four people rather well. This type of set up is likely to cost in the region of £6,000–£7,000.
At the current FiT for solar PV, you will be looking at making around £500–£600 a year in payback. You will likely need to replace the inverter in around 10 years’ time at a cost of approximately £1,000.
- Total outlay (inc one new inverter): £7,000–£8,000
- Yearly FiT income: £500–£600
- Estimated payback: 11–14 years
This means you will be getting free energy for at least six years (the payments for solar PV are 20 years, or 25 if you installed before 2012), and turning a profit.
How do I claim?
- Assess your energy needs and which renewables would be best suited to your home.
- Use an MCS-certified installer to fit your technology. They will register you to the MCS database and issue you with a certificate.
- Apply for the FiT scheme with a registered energy supplier (see the list of FiT licensees).
- Receive payment from your energy supplier each quarter.