Feed-In Tariff

The ‘Feed-In Tariff’ or Clean Energy Cashback scheme as it’s also known was introduced in April 2010. There are three elements benefiting householders and businesses, namely:

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.

Deemed export

Domestic FIT installations are likely to have their export deemed (estimated) at 50% in most cases until smart meters are rolled out.

Eligible technologies

• Solar PV
• Wind
• Hydro
• Anaerobic Digestion
• Biomass CHP
• Non-renewable CHP

You will qualify for the full FIT payments if:

• The technology was installed between 15th July 2009 and 31st March 2010 and you transferred to FITs before 1st April; OR

• It is installed after 1st April 2010 using an MCS* certificated product and installer; * The Microgeneration Certification Scheme (MCS) is an independent scheme that certificates microgeneration products under 50kW and installers in accordance with consistent standards. Any commercial or larger scale systems, over 50kW, and all anaerobic digestion installations must apply directly through the Renewables Obligation Order feed-in tariff process for larger installations (ROO-FIT) process as they are not covered by the MCS.

Tariff levels, for technologies installed between 15th July 2009 and 31st March 2012 of most significance to householders:

Tariff levels vary depending on the scale of the installation. All generation and export tariffs will be linked to the Retail Price Index (RPI) which ensures that each year they follow the rate of inflation.

Benefits

Typical Example of how the Feed-In Tariff could benefit you:

• A typical house uses 4000 units of electricity per year @ 13.95p per unit average cost is therefore £558.

If you install a 3kw Solar PV system the benefits are:

• *Feed in Tariff rate : 41.3p per unit generated, 3p per unit exported to the grid
• *Electricity generated from Solar PV per year 2640 units * 50% used in property (1320units) 50% exported to the grid (1320units)
• Feed In Tariff Income 41.3p x 2640 = £1,090 Export Tariff Income 3p x 1320 = £40 avoided electricity 13.95p x 1320 = £184

Total Income and Savings = £1,314 per year

These payments are guaranteed for 25 years during which time this system will produce a profit of £18,000 Payments are also R.P.I linked so that inflation does not have a negative impact on your investment.

Example of how the Feed-In Tariff works

• You will require an additional electricity meter to measure the electricity that your system is generating, and also to measure how much is being fed back into the electricity grid.
• Once your chosen installer has installed your generating technology, they will register you on the central FIT database and you will then receive a certificate confirming FIT compliance.
• You must then inform your chosen energy supplier that you are eligible to receive the FIT by providing the certificate.
• The supplier will then cross reference your installation with the central FIT database.
• Payments will then be made by your energy supplier at intervals to be decided between you and your supplier.
• You may be required to provide meter readings to the suppliers if requested.

If you would like to find out more about the Feed-In Tariff please contact us today on +44 (0) 8714 333 333.