Feed-In Tariffs scheme (FITs)
If you install an electricity-generating technology from a renewable or low-carbon source such as solar PV or wind turbine, the government's Feed-In Tariff scheme (FIT) could mean you get money from your energy supplier.
You can be paid for the electricity you generate, even if you use it yourself, and for any surplus electricity you export to the grid. And of course you'll also save money on your electricity bill, because you'll be using your own electricity.
A similar scheme is being introduced for heat generation: the Renewable Heat Incentive.
About the scheme
Most domestic technologies (and larger systems up to 5 megawatts) qualify for the scheme, including:
- solar electricity (PV) (roof mounted or stand alone)
- wind turbines (building mounted or free standing)
- hydroelectricity
- anaerobic digesters
- micro combined heat and power (CHP).
It is energy suppliers that will pay you the FITs payments with the 'big six' energy suppliers required by law to provide these payements. Some smaller electricity suppliers may not offer FITs payments as it is not compulsory for them though many have opted to offer the payments. Find the list of FITs-licensed suppliers at the Ofgem website.
The tariffs available and the process for getting them depend on when the technology was installed, and whether the system and the installer were certificated under the Microgeneration Certification scheme.
How FITs work
Electricity is created by solar panels. Your electricity supplier pays you for each unit of electricity you generate.
You can use the electricity you generate meaning you don’t have to import from the grid
You export electricity back to the grid when you don’t use it. You are paid an export tariff
You import electricity from the grid when you need additional power.
If you are eligible to receive FITs you will benefit in three ways:
- Generation tariff - your energy supplier will pay you a set rate for each unit (or kWh) of electricity you generate. Once your system has been registered, the tariff levels are guaranteed for the period of the tariff (up to 25 years) and are index-linked. For a full list of generation tariffs, see FIT payment rates published by the Government
- Export tariff - you will get a further 3.1p/kWh from your energy supplier for each unit you export back to the electricity grid, so you can sell any electricity you generate but don't use yourself. This rate is the same for all technologies. At some stage smart meters will be installed to measure what you export, but until then it is estimated as being 50% of the electricity you generate.
- 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.
A typical domestic solar electricity system with an installation size of 3kWp could earn:
- £530 a year from the Generation Tariff
- £40 a year from the Export Tariff
- £100 a year reduction of current electricity bills
to give a total saving of around £670 per year. See our Solar Energy Calculator to find out how much you could earn.
*this is based on the proposed 21p/kWh rate in the UK Government’s solar FITs review consultation.
You will need an extra electricity meter called a Total Generation Meter. This measures the electricity your system is generating. Your MCS certificated installer should provide this as part of the installation package and should include it in the original quote.
Registering for FITs
Once your chosen installer has installed your generating technology, take these steps to register for FIT:
- Ask your installer to register you on the central MCS database. The installer will then send you a certificate confirming MCS compliance.
- Tell your chosen FIT supplier that you wish to register for the FIT and send them a completed application form along with the MCS certificate.
- Your FIT supplier will cross-reference your installation with the MCS database and undertake other eligibility checks.
- Your FIT supplier will confirm your eligibility and the date you are eligible for payments from
- Your FIT supplier will add you to the Ofgem Central FIT Register, which records all installations in the FIT scheme
- Your FIT supplier will agree with you if and when you will need to provide meter readings and when they will make FIT payments to you – these will form part of your statement of FIT terms.
- If you want to opt out of the guaranteed export tariff you must tell your FIT supplier - you would only do this if you have a separate Power Purchase Agreement to sell your surplus on a commercial basis.
