Tom Melhuish 5 min read

What is the feed-in tariff scheme?

The feed-in tariff was a government scheme that allowed businesses to generate renewable energy and sell it back to the national grid.

In this guide, we explore what the feed-in tariff was and what the latest initiative is for exporting renewable energy back into the grid.

What is the feed-in tariff scheme?

The feed-in tariff is an incentive scheme where the government pays homeowners and businesses to generate and export their renewable energy back into the national grid.

It was officially closed in April 2019; however, the closure will not affect you if you are already enrolled on the feed-in tariff scheme.

Businesses and homeowners looking to sell renewable electricity to the grid can now apply for the new Smart Export Guarantee, the latest renewable generation incentive scheme.

What technologies are available for the feed-in tariff scheme?

Here are the technologies that are available for the feed-in tariff scheme.

Solar panels.
Wind turbines.
Micro-CHP (micro-combined heat and power).
Hydroelectric systems.
Anaerobic digesters.

How does the feed-in tariff scheme work?

Firstly, you need to have an eligible system installed that is MCS certified on or before 31st March 2019.

When applying for the payments, you don’t need to use the energy supplier with which you currently have an energy agreement; it can be with any holding a FiT license. By law, the larger suppliers had to enrol on the FiT scheme so they were available to onboard qualifying businesses.

Payments on the FiT scheme is usually paid on a quarterly basis. Readings are taken from a smart meter; if you don’t have a smart meter, you’ll need three different business energy meters:

Generation.
Import.
Export.

What rates are paid on the feed-in tariff scheme?

The two types of payment for the FiT scheme are the generation tariff and the export tariff.

Generation tariff:

This is where you’re paid by the energy supplier based on each kWh of electricity you produce. The rate you are paid depends on the type of technology you use, your location and the energy efficiency of your property.

Here were the final rates before the scheme closed down:

Standard solar PV: 3.79 pence per kWh
Wind turbine: 8.24 pence per kWh
Hydropower: 8.03 pence per kWh
Combined heat and power: 14.52 pence per kWh

Export tariff:

The export tariff is the payment you receive for the extra electricity you generate and sell back to the local electricity distribution network operator.

The rate currently paid for FiT is 5.24 pence per kWh.

For more information, here’s our full guide to business electricity prices per kWh.

What are the benefits of using the feed-in tariff scheme?

The benefits of the feed-in tariff scheme are as follows:

Save on your energy bills.
Improving the environment by reducing carbon emissions.
Get paid for the energy you don’t use.

Why did the feed-in Tariff Scheme end?

The feed-in tariff was incredibly successful, with 850,000 households and businesses signing up. The reason for the closure was due to the significant fall in the cost of commercial solar power and other projects taking precedence.

What has replaced the feed-in tariff scheme?

The Smart Export Guarantee has replaced the feed-in tariff scheme. It works in the same manner as the FiT scheme, but instead of the government paying, the licensees pay.

To qualify, anyone with one of the following technology types can benefit:

Commercial solar panels
UK wind farms
Micro combined heat and power (micro-CHP)
Hydro
Anaerobic digestion (AD)

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