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The Benefits
How the scheme works
If you are eligible to receive the FIT then you will benefit in 3 ways:
1. Generation tariff - a set rate paid by the energy supplier for each unit (or kWh) of electricity you generate. This rate will change each year for new entrants to the scheme (except for the first 2 years), but once you join you will continue on the same tariff for 20 years, or 25 years in the case of solar (PV).
2. Export tariff - you will receive a further 3p/kWh from your energy supplier for each unit you export back to the electricity grid, that is when it is not used on site. The export rate is the same for all technologies.
3. Energy bill savings - you will be making savings on your electricity bills , because generating electricity to power your appliances means you do not 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.
Feed-in Tariff scheme
Feed-in Tariffs (FITs) became available in Great Britain on 1st April 2010. And is not available in Northern Ireland - although this is under review.
Under this scheme energy suppliers have to (compulsory for big six suppliers) make regular payments to householders and communities who generate their own electricity from renewable or low carbon sources such as solar (PV) or wind turbines.
About the Scheme
The scheme guarantees a minimum payment for all electricity generated by the system, as well as a separate payment for the electricity exported to grid. These payments are in addition to the bill savings made by using the electricity generated on-site.
Once you have a microgeneration technology installed you should experience a monthly reduction in your electricity bill and then receive an income from your Feed-in tariff provider. However, if you have taken out a loan to pay for the installation you will have to make monthly repayments to your loan company.
Feed-in tariffs are designed so that the average monthly income from your installation will be significantly greater than your monthly loan repayment (with a 25 year loan).
Use the cashback calculator to see how purchase price and loan can impact on payback times.
As an Example
As an example, a typical domestic solar electricity system, with an installation size of 2.2 kWp could earn around:
Average annual earnings from Government-backed Feed-in Tariff(How this works: for every unit of energy you produce, the Government will pay you 43.1p) | £770 |
Average annual earnings from exporting back to National Grid(How this works: you'll be paid 3p for every unit of enery you produce and feed back to the National Grid) | £30 |
Average annual savings on your electricity bill(How this works: as you'll be producing your own electricity, you'll need to buy less from your energy company) | £120 |
Total annual earnings and savings | £920 |