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Feed In Tariffs (FITs)

The new system of Feed-in Tariffs (FITs) due to commence from 1st April (2010), will provide support aimed at small low-carbon generators, by opening up low-carbon electricity generation beyond the traditional energy companies.  This will be achieved through fixed payments made by energy suppliers, to micro generations which are under a 5MW capacity including the following technologies

  • Wind
  • solar PV
  • Hydro
  • Anaerobic Digestion

The Government has recently finalised the FIT.  These payments will be made through two separate tariffs, the generation tariff and an export tariff.  The generation tariff has the added bonus that not only do generators get paid for producing electricity on site; they will be able to offset this against electricity they would otherwise have had to buy.  The current generation tariff could provide between 5-8% return on investment.   


The second export tariff allows any excess electricity generated but not used on site, to be exported back to the grid, for an additional payment fee which is currently set at rate of 3 pence per kilowatt hour. 


The key for Government is of course to make sure that all electricity generated is monitored through metering, and that energy suppliers are the key players in the delivery.  In order to achieve this, Government are proposing that all suppliers over a given threshold are required to offer FITs, and the actual FITs payments made by each supplier will be redistributed among all licensed suppliers in a centralised levelisation process to ensure all suppliers bear the right amount of the costs depending on their share of the UK electricity market.


Overall, FITs may provide not only an incentive for onsite microgeneration installations, and smart metering installations, they encourage energy reduction measures as well, because the lower a buildings demand for energy is, the more electricity the building owner will be able to export back to the grid for payment.  

For more information visit the DECC website.

 

 

This web page provides general FIT information, but developments may overtake some of the information provided. As such, this is not intended, and should not be used, as the basis for any commercial plans or decisions.