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Feed-In Tariff
Key Terms
- Feed-in Tariff (FiT)
- FiT is an umbrella term referring to the electricity generated from you Solar PV system and how much you are paid from it. Within FiT there are two different tariffs; the Generation Tariff and the Export Tariff.
- Generation Tariff
- The electricity company pays a set amount for every unit of generated electricity whether this electricity is used in the property or exported back to the national grid.
- Export Tariff
- This is an additional payment for any electricity that is exported to the national grid from your Solar PV system.
- Estimate
- For an instant estimate on how much energy and earnings you could generate from your property please visit our estimate page.
Alternatively, for an independent energy saving calculation you can use the energy saving trust cash-back calculator. - More Information
- For more independent information visit the REAL website at: www.realassurance.org.uk
You can also view information on the feed-in tariff scheme by reading our REAL feed-in tariff scheme guidance for consumers document.
Feed-In Tariff
Explained
The Feed-in Tariff scheme, known as FiT is a new scheme designed to promote the use of renewable energy installations and low carbon technologies. Customers using the scheme will get paid for any electricity they generate via the Generation Tariff and will also be paid a further premium for any electricity that is exported back to the national grid via the Export Tariff.
The FiT scheme is intended to make renewable energy an extremely cost effective solution when compared to more traditional energy supplies. The scheme is applicable for a range of electricity generating technologies, including Solar PV, up to a maximum capacity of 5MW.
Why Should I Do This Now?
Solar PV systems and other renewable technologies provide an immediate benefit for the environment and 34.6 represent a distinct shift in the mind set of electricity 35 production. To encourage the immediate use of these systems the Government have introduced a generous Generation Tariff for all Solar PV installations completed 25 before April 2012. The Generation Tariff will drop by 8.5% every year following April 2012.
The current Generation Tariff will pay 41.3p/kWh up to 2012 but if you waited until 2015 to install your system you would receive only 28.9p/kWh. The only way to guarantee that you receive the higher rate Generation Tariff is to make sure you get your system fully installed before April 2012. All systems installed before that date will not only receive the higher rate but it will also track inflation for the next 25 years to ensure a fair payout for the future.
What Are The Benefits?
These two examples clearly demonstrate the benefits and savings of installing a Solar PV system to supply renewable energy into your home and business. Even though some electricity is still imported in the traditional way via an electricity supplier it is far outweighed by the amount paid via the Feed-in Tariffs.
| Home 1 No Solar | Home 2 2.1kWp System | |
| Imported Electricty (Approx 12.76p/kWh) | £421.08 / year | £307.20 / year |
| Generation Tariff (41.3p/kWh) | £0 | £737.20 / year |
| Export Tariff (3p/kWh) | £0 | £26.78 / year |
| Total | LOSS £421.08 / year | PROFIT £570.66 / year |
Figures are based on a 2.1 kWp system at 50% usage.
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