The Feed-In Tariffs are a new Government-backed measure to make it worth your while to produce renewable electricity. There are three ways that the Tariffs help you make money from generating your own energy:
Earn a fixed income for every kilowatt hour of electricity you generate and use in your property.
You earn an additional fixed income for every kilowatt hour of electricity you generate and sell back to the grid.
When you can't generate enough electricity for your needs (when the wind don't blow and the sun don't shine) you buy electricity from your utility company at the normal rates BUT it'll be much less electricity than you currently buy.
Renewable heat has its own similar tariff mechanism - see here .
For further information on the Feed-In Tariffs see our Idiot's Guide or look at the detailed pages listed below.
What is ‘tariff degression'? .. and how would it apply to my system?
The level of the tariff applicable to systems installed in the future will decrease with time, using the annual 'degression' rates as described on this page . The degression rate is used only to determine the tariff applicable to the system based on its registration date - once you've been alocated a tariff that rate would apply for the full 20/25 years above.
[For example: If you install a 5kW PV system in June 2010 you would receive 36.1p/kWhr for 25 years until June 2035. If you installed it in June 2012 you would receive 33p/kWhr until June 2037]
Do I have to accept the 3p/unit of power exported or can I trade the electricity on the market?
You don't have to accept the fixed price; you can opt to negotiate your export price on the market. However you will have to decide at the start of each year if you want to do this, and will then have to stick to it - you can only swap between fixed and market pricing once a year.
Do I have to pay tax on my Tariff income?
It was announced in the Pre-Budget Report 2009 that the income from the tariffs will be free of income tax for householders who install systems primarily for their own use. See the details here .
Is the Tariff subject to inflation?
The Tariffs are index-linked to the Retail Price Index (RPI) as shown here .
Which is better financially for larger systems, FITs or ROCs?
The government has tried to set the tariffs for larger systems at about the same level as the RO.
The decision on which to go for will depend on your view of the administration associated with each option, and the certainty of the price you will get under each (ROC and electricity prices are both variable and can be volatile at times).
Who pays for the Feed-in Tariffs?
The system is administered by the official regulator Ofgem, and uses money from a levy on all electricity sales, collected and distributed by the licensed electricity suppliers as described here . Therefore if you install a renewable energy system you get a treble benefit:
· Your income from the Feed-in Tariff
· An extra income for every kWh you export
· Because you are producing some of your own power, you will buy less electricity and therefore pay less for it (and so less levy)
How long would I get this tariff for?
The Feed-In Tariffs will be paid for a period of 20 years from the date the system is first registered, except for solar photovoltaic systems where the period is 25 years . If the system doesn't last that long, of course it will stop producing kilowatt hours and no tariff will be paid.
How much is paid for each kilowatt hour?
This varies by type and size of system - see the tariffs table to find out more.
Solar PV |
=4 kW new [C] |
36.1 |
25 |
Solar PV |
=4 kW retrofit [C] |
41.3 |
25 |
Solar PV |
>4-10kW |
36.1 |
25 |
Solar PV |
>10 - 100kW |
31.4 |
25 |
Solar PV |
>100kW - 5MW |
29.3 |
25 |
Solar PV |
Standalone [C] |
29.3 |
25 |
[C]: These terms are defined as follows:
· “Retrofit” means installed on a building which is already occupied
· “New Build” means where installed on a new building before first occupation
· “Stand-alone” means not attached to a building and not wired to provide electricity to an occupied building
Once a system has been registered, the tariff levels are guaranteed for the period of the tariff and index-linked as described above. For systems registered in future years, some tariff levels will be adjusted to account for expected reductions in system prices, as further described here. For household customers producing energy mainly for their own use, the tariff income is also free from income tax as described here.
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