A Feed-in tariff offers payment to households that use renewable technologies in order to produce electricity at home. The scheme started in April 2010 and is open to all households and community groups in the UK, excluding Northern Ireland at the time of writing. Payments are guaranteed by the government and paid for via a levy on consumers' energy bills.
If you're interested in boarding the feed-in tariff gravy train, you should first be aware that in order to qualify for the higher rate of tariff, you home will need to have obtained at least a D on its energy performance certificate. As such it may be appropriate for you to review your homes insulation, windows, boiler etc. and make improvements where needed, before spending thousands on installing renewable technology. The energy saving trust has a very useful calculator which will help you calculate the cost of any improvements, along with the payback period on the savings.
How does a Feed-in Tariff Work?
There are three elements to the feed-in tariff scheme
- Generation Tariff: This is a fixed rate payable to subscribers for the total amount of electricity generated. The rate you'll receive is determined by the rate you were given when you first signed up, as well as the size and type of installation.
- Export Tariff: You get paid for the units of electricity generated which are exported back to the national grid (assuming that your own home hasn't used them all). For smaller installations, or instances where you have no two way meter installed, it is assumed that 50% of the generated electricity is exported.
- Energy Bill Savings: You'll be generating a portion of your home’s electricity yourself from 'free' sources and therefore your energy bills will be lower (assuming your consumption doesn't increase of course)
The energy saving trust will be able to give sound advice as to what technologies are suitable for your home. Technologies that qualify for the feed-in tariff scheme include
- Solar Panels (photovoltaic 'PV')
- Small wind turbines
- Anaerobic digestion
- Micro combined heat and power (micro CHP)
Joining the Feed-in Tariff Scheme
To join you're going to need to have your renewable energy source installed by a company accredited for the Microgeneration Certification Scheme. You should easily find a few suppliers within your area, so make you sure to get several quotes to get the best deal.
Once installed the company will provide you with a feed-in tariff certificate, which you can then present to your chosen energy supplier to get signed up on the programme. The supplier should then take care of the rest for you, advising how often you need to send meter readings, and how often you'll receive payments. They'll also advise and make arrangements should a new meter need to be installed, which you may or may not have to contribute towards (varies by supplier)
If you already have the technology installed you may be able to join straight away. If your energy source was installed after 1st April 2010 you can seek to get it accredited by a qualified professional for the Microgeneration Certification Scheme (MCS). If your installation was before this date, you won't be able to join the FIT unless you previously had a Renewable Option Certificate (ROS), and transferred it to the FIT scheme before April 1st 2010.
For other technologies such as solar water heating, ground source heat pumps, and wood heating systems, a separate scheme exists. For more information please refer to our 'Domestic Budgeting – Renewable Heat Incentive' guide