What is the Feed in Tariff?
The feed in tariff is a government incentive designed to increase the level of renewable energy in the UK towards our legally binding target of 15% of total energy from renewable sources by 2020 which will be up from under 2% in 2009.
The payments for the feed in tariff are paid to ordinary energy users for the renewable energy they generate from their own renewable technology installed o the property.
Feed in tariffs (also known as FITS) are the electricity part of what is known as the Clean Energy Cashback, a scheme that pays people for generating their own 'green electricity'.
The Feed in tariffs or FITS as they have been known as are a financial incentive to encourage homeowners and businesses to fit renewable energy systems to their properties and generate electricity on a local scale. There are a number of reasons why they have been introduced but at the most basic level, like many other countries we urgently need to address the fact that our energy consumption requirements continue to increase, whilst in contrast our ability to generate electricity using traditional methods will decrease in years ahead, as fossil fuels and nuclear power stations are decommissioned but not replaced. The other key objective of the scheme is to facilitate a significant increase in the amount of power we generate nationally from renewable methods, with the aim of meeting the EU target set for the UK of 15% through renewable energy by 2020.
Since April 2010, the UK feed in tariff scheme offers homeowners or commercial businesses/property owners the chance to receive money for every kilowatt hour (kWh) of energy generated using approved technology that is installed on their property.
The consumer is free to use all the electricity they generate or indeed can sell it back to the grid for an additional premium of 4.5p.
Technologies which qualify for the FIT payments are:
- Solar PV (roof mounted or stand alone)
- Wind Turbines (building mounted or free standing)
- Anaerobic digesters
- Micro-combined heat and power (CHP)
How FITS work
There are three ways you benefit from the feed in tariff:
Whoever you choose to go with to be your fit provider will pay you a set rate for each unit (kWh) of electricity you generate. Once the system is registered with Ofgem, the tariff is then guaranteed for 20 years post August 1st and index linked.
You will get paid a further 4.5p from your fit provider for each unit you put back into the grid (unused energy). The government estimate that you will export 50% of what you generate so will pay you for this. An export meter is installed to measure the amount you put back into the grid when the system size is above 30kW.
Energy Bill Savings
You will be making savings on your electricity bill because of using your own electricity that you have generated with your renewable technology, rather than purchasing it from the grid. The amount you save will vary depending on how much you will use on site.
A typical domestic installation could earn:
- £530 a year generation
- £40 a year export
- £100 bill reduction on current energy bills
This gives a total payments/savings of around £670 a year.
Registration of FITS
When signing a contract with Green Energy Generation, we take care of the application of your Feed In Tariff to the specified FIT provider of your choice. This way, we provide a service that enables our customers to receive a straight forward and easy registration route onto the microgeneration scheme.
Customers must provide proof of ID for their application to the Feed in Tariff however, alongside a signature; this is the only material the customer is to put forward. The rest of the application is dealt with on behalf of the customer by our team at Green Energy, again making the change to renewable a lot smoother.
If you would like to enquire about the Feed-in Tariff, please call us on 01670 828695 (Northumberland), or 01751 432096 (North Yorkshire).