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Feed-in Tariff Scheme: How it Works

Feed-in tariffs (FITs) provide money for consumers who generate their own electricity. Find out how the Feed-in Tariff scheme works and how to apply.

FIT SCHEME UK: There are several ways of generating your own electricity. Typical examples might be from a wind turbine or from solar panels.

If you are in the scheme you can get a payment from your energy supplier. In some cases, you can also sell the energy back to the grid.

Note: Recent Changes to the FIT Scheme

The new FIT scheme replaced the old scheme from the 8th of February 2016 with a new set of tariff rates. The new FIT rules also limit the number of supported installations.

FIT applications received by the 14th of January will get considered under the old rules. Thus, those that qualify will still get the old tariff rates.

Note: Anyone with a FIT plan issued before the 14th of January 2018 does not get affected. You can visit the Ofgem website for further details about FIT rules under the new scheme.

How the Feed-In Tariff Scheme Works

Ofgem will confirm whether your application is successful. If so, you get a set amount for each unit (kilowatt hour or kWh) of electricity that you generate. The rates of the ‘generation tariff’ vary according to:

  • What kind of technology you install and when the system got installed.
  • The size of system you are using to generate electricity and how energy efficient it makes your home.

You must use a certified installer according to ‘The Microgeneration Certification Scheme’. Payments will come from your current energy supplier or one you choose from the list of registered suppliers with FIT licensees.

Export Tariff (selling surplus energy)

Your electricity supplier will pay you for any extra unused units. They will pay 4.85 pence per unit of electricity according to the ‘export tariff’.

FIT rules allow you to sell back up to half of the units of electricity that you generate. Installations above 30kW will need an export meter. Doing so, saves you money on the electricity bills for the energy that you use.

Calculating Earnings through the FIT Scheme

The ‘Energy Saving Trust’ calculators estimate how much you can earn using the FIT scheme. They will also work out potential earnings for selling unused energy back to the grid.

How to Apply for Feed In Tariff

Installations must have a peak output of no more than 5 megawatts (MW) or 2 kilowatts (kW) if they use micro-combined heat and power technology. Types of technologies that are covered include:

  • Anaerobic digestion (biogas energy)
  • Hydro turbines
  • Micro combined heat and power (micro-CHP)
  • Solar photovoltaic (PV) panels
  • Wind turbines

Before Applying

You need to make sure your home is as energy efficient as possible. Get a Green Deal Assessment or do a home energy check. The Energy Performance Certificate (EPC) gets used to work out the feed-in tariff (FIT) rate.

After choosing what type of technology you want you must have it installed by a certified installer. As a rule, you will need a certificate from your installer. It will confirm that the installation meets Microgeneration Certification Scheme standards.

Sending an Application

The application process varies with different suppliers. Contact one of the FIT licensees to check how to apply. A successful application means you will get payments from your current energy supplier. You can also choose to receive money from a different supplier.

How the Feed-in Tariff Scheme Works in the United Kingdom