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Feed in Tariff (FIT)
As pressure grows for us to deal with the causes of climate change we all know that our energy bills are going to rise. Or are they? Would you believe that, not only is there a way for you to get free energy, but to get paid for producing it?
On the 1st of April 2010 a new scheme was introduced that will provide financial incentives for people and businesses to install electricity-generating technologies such as solar electricity panels and wind turbines.
The Clean Energy Cashback (also known as Feed In Tariffs), scheme will guarantee a minimum payment for the electricity generated as well as the electricity exported to grid.
Please note that these tariffs only apply to England, Wales and Scotland. Northern Ireland has not yet taken a decision on Feed In Tariffs.
So how will it all work? There are three ways in which you will be able to benefit if you install and use an eligible technology:
• Generation tariff: a fixed payment from your electricity supplier for every unit of energy or kilowatt hour (kWh) generated (the 'generation tariff') for a period of 20 years (except for solar PV which would be for 25 years).
• Export tariff: if you do not use the electricity on-site you can export it to the grid. You will get a guaranteed minimum payment (3p/kWh) additional to the generation tariff for every kWh exported to the grid (the 'export tariff').
• On-site use of electricity: you will also benefit from on-site use of the electricity you generate: where you use the electricity on-site you will be able to offset this against electricity you would otherwise have had to buy.
Eligible technologies There will be support for the following technologies from 1st April 2010:
• - wind turbines
• - solar photovoltaic (PV) (electric)
• - hydroelectricity
• - anaerobic digestion
• - non-renewable micro-CHP (initially a pilot for up to 30,000 units)
Off-grid generators and installations on new-build will also be eligible for the Clean Energy Cashback.
FAQs
Will I still be eligible to receive a grant? Grants for electricity generating technologies are now closed in England and Wales and Northern Ireland. Note that the situation with regards to the Energy Saving Scotland home renewables grant scheme may differ slightly. How this affects the grants is not known at this stage until further guidance from the Scottish Government is received. Grant availability for heat generating technologies is due to continue as long as funds last. Grants are allocated on a first come first served basis.
Will I be eligible if I have already received a grant? Domestic installations which received a grant will still be eligible for the Clean Energy Cashback.
Non-domestic installations (charities, schools communities and other not-for-profit organisations) which received a grant under LCBP-2 after 15 July 2009, have the choice of either:
• retaining their grant and not being eligible for FITs;
• or repaying their grant and claiming FITs.
Those who received a LCBP-2 grant before 15th July cannot claim the Clean Energy Cashback. However, up to 31st march 2010 they may be able to apply to Ofgem for a ROC, to qualify for the lower tariff of 9p/kWh, as well as the 3p/kWh export tariff.
Will I be eligible to receive the tariff if I move into a home that already has an electricity generating technology? Installations made as of 15 July 2009 are proposed to also benefit from the full tariff, even if they are on new developments.
What happens if I move home?
Ownership of the technology is linked to the site and, therefore, in the case where a building or homeownership changes, the ownership of the technology would also transfer to the new owner.
Do I need to use a certified installer and product to benefit from the tariff? Yes. For microgenerators, the Microgeneration Certification Scheme (MCS) is a requirement for eligibility as of 1 April 2010.
I rent my property. If my landlord installs an electricity generating technology, who would receive the FITs? It will be up to landlords and tenants of domestic or commercial property to come to an arrangement about the receipt of payments and on-site electricity use benefits.
Will I need a special meter to be able to claim FITs? Generation must be metered and FITs payments are made to generators on the basis of metered generation. Meters will need to be able to measure generation, usage and import. However, as an interim measure, DECC has announced that at the very small scale, the amount of exports for the payment of export tariffs can be deemed (estimated), subject to the following:
• These arrangements will only apply until the finalising of specifications for smart meters;
• These arrangements do not apply if export meters exist already, or are provided at the generator's expense
• Find out more about the government's consultation response
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