Feed In Tariffs – Eligible and Economic?

Putting a renewable energy source in your home is often regarded as an investment. Weighing up the costs of installing a system against the money it will produce is in essence the decision. Therefore, understanding Feed In Tariffs (FIT) is vital in deciding whether to have a renewable energy source at your home.

How FIT works:

The FIT is a Government scheme to encourage more electricity-generating technologies in homes and businesses. The scheme will be of benefit in three ways.

1. Energy Bill Savings – generating your own electricity means you will be buying less energy from your supplier.
2. Generation Tariff – your energy supplier will pay a standard rate per unit for all the electricity generated, even if you use it in your property.
3. Export Tariff – you will be paid per unit for all the electricity you export back to the National Grid, so electricity you don’t use is sold back to the suppliers.

Being Eligible for FIT:

The technologies that qualify for the scheme are PV solar panels, wind turbines, hydroelectricity, anaerobic digesters and micro-combined heat power. However, in order to be eligible you must fulfil certain criteria:

• Ensure your energy supplier pays FIT. The ‘Big Six’ are legally required to pay but smaller companies may not.
• Have an Energy Performance Certificate (EPC) of band D or above.
• Use a Microgeneration Certification Scheme (MCS) certified installer.

The Rate of FIT:

FIT are subject to change and have recently been cut by the Government. The rate received is dependent on when your system was installed and registered with FIT. If you already have a renewable energy source your rate and length of subsidy will not change.
For any new technologies installed after the 1st August 2012 the rates are:

• Generation Tariff: 16 pence per kilowatt hour (formerly 21p/kwh)
• Export Tariff: 4.5 pence per kilowatt hour (formerly 3.2p/kwh)

Some technologies will be fitted with a meter to measure the amount exported. Otherwise it is estimated that 50% of all generated electricity is exported.

Both of these subsidies will now only be payable over 20 years, no longer 25 as it was before. So the cost of the renewable energy system should be compared to savings over a 20 year period.

Making FIT financially viable:

Though the cuts to FIT have hit renewable energy sources they can still represent a good investment, much better than a savings account. To get the most out of FIT you need to research how suitable your home is for the energy source.

Obviously, whatever system you have you want it to generate as much electricity as possible. Research your technology. Find out what size system will produce the best results. Remember, it is not necessarily bigger is better. Though a bigger system will produce more electricity it will cost more. Solar panels are the most popular form of domestic renewable energy – to get help and resources to find out if they would suit you check out our blog “are solar panels right for you?” :

As well as finding the right renewable energy source you can also get the most from FIT through your lifestyle. For example, if you have solar panels it is best to use electricity more in the day when the panels are producing electricity. This way you will use more electricity but still get paid a fixed export tariff. So you are actually exporting less but getting paid the same. Alternatively, if you think you are exporting much more than the fixed rate you can get a meter fitted and get paid for exactly what you export.

If you decide if renewable energy is for you it is easy to register. All you have to do is get a MCS certificate from your installer and send this with a completed application form and EPC of band D or above to your supplier. They will then organise your payments.

FIT can make renewable energy a worthwhile investment as long as you get the most from your technology. Research into your own situation will decide if electricity-generating technology is a good choice.

Written by Michael Hallam