Feed In Tarriffs.

In April 2010 the UK government introduced the Clean Energy Cash Back Scheme as a financial incentive to encourage the uptake of renewable energy technologies.

The Clean Energy Cash Back Scheme put in place FITs as a financial support mechanism For people undertaking renewable energy. The government need to encourage the uptake of such technology to help deliver on the 2020 renewable energy targets.

There are three parts to the FIT scheme to understand. Together these make up the amount of money your system will generate / save you.

The scheme pays you an amount for every unit of power (kilo Watt hour/kWh) that your system generates. The amount paid per unit is dependant on the size of the system. For most domestic systems retro-fitted on homes this amount is 43.3p/unit.

It is also dependent on the point at which you join the scheme, the Feed In Tariff is set to drop year by year from April 2012. It is important to note that this is TAX FREE and index linked.

Each unit of electricity that is surplus to the power requirements of your home is eligible for an export tariff which is in the region of 3p/unit depending on your energy provider.

If you are eligible to receive the FIT then you will benefit in 3 ways:

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.

Example of how the Feed-in Tariff works: