Feed-in Tariffs

Feed-in Tariffs

Feed-in tariffs (FITs) were introduced by the Government on the 1st April 2010 to support the uptake of micro generation technologies.  The FITs scheme guarantees a minimum payment for all electricity you generate as well as paying you for any electricity you export to the national grid.  FITs are paid by electricity suppliers, not the government.  There are two types of tariff:-

  • Generation Tariff
  • Export Tariff

Generation Tariff

The generation tariff is the set rate paid by your energy supplier for each unit of electricity (kWh) generated.   Tariff rates vary according to the type and size of system.  The following rates are valid up to the 31st December 2016:

  •  0-10kW    – 4.18p
  • 10-50kW   – 4.39p

The rates are set to reduce on a quarterly basis but once you join the scheme, the rate is guaranteed for 20 years and it is index linked.

Export Tariff

You will receive an extra 4.91p for each unit exported to the grid.  (This rate is valid until March 2017) There has been a fair amount of misunderstanding about ‘selling back’ to the grid so this is how it works.  Currently, the amount of electricity you actually use from your Solar PV system is not metered so there is an assumption that 50% of what you generate is exported to the national grid.  What you generate is metered so the energy company will offer you a further 4.91p per unit for 50% of the units generated.

Feed-In Tariff Payments

The payment is calculated from meter readings taken from a special generation meter installed adjacent to your fuse board.  Once your PV system is commissioned, you will need to apply to your electricity supplier for the Feed-in Tariff.  We help our customers by preparing the application form for them.  Once your application is received, your energy company will write to you and offer you a Feed-in Tariff contract.  This is separate to your electricity supply contract.  You will be asked to provide a reading from your generation meter, usually on a quarterly basis, and from this reading they will calculate your payment.  Money is then paid to you either by cheque or directly into your bank account.

Example Calculation

Let’s use the example of a 4kW Solar PV System (16x250W panels)

On a south facing roof with a 30 degree pitch and no over-shading, this system can generate 3908 kWh / year (using MK postcode).

  • The Generation Tariff would be 3908 x £0.0418 = £163
  • The Export Tariff would be 3908 x 50% = 1954 x £0.0491 = £95
  • Total Feed-in Tariff = £258

So in this example, based on the export tariff valid until March 2017, you would receive quarterly payments adding up to approximately £258 over a year.

Add to this the amount you save on your electricity bill and you have the annual payback from your PV system.  Using the example above, if you currently pay 12p/kWh for your electricity were able to use 50% of the electricity you generated (1954 kWh) this would save £234 on your electricity bill (1954 x 12p/kWh).  Total income and savings in our example would be £492 per year.