What is a feed-in tariff?

	The feed-in tariff is set at a level dependant on size.
	There will be an additional payment of 3p for the units exported to the grid.
	The payments are guaranteed by law for 25 years.
	The payments are index linked and will rise with Retail Price Index inflation.
	For domestic properties the revenue is tax exempt.

<4kW (New Build)	21.0 p/ kWh
<4kW (retrofit)	21.0 p/ kWh
>4-10kW	16.8 p/ kWh
>10-50kWh	15.2 p/ kWh
>50-100kWh	12.9 p/ kWh
>100-150kWh	12.9 p/ kWh
>150-250kWh	12.9 p/ kWh
>250kW-5MW	8.5 p/ kWh
Stand alone	8.5 p/ kWh

All installations must be carried out by an MCS-approved installer, using MCS-approved products to qualify for the feed-in tariff. All accredited installations from July 2009 onwards will be eligible. The tariff is guaranteed for the next 25 years, although the rate given in the first year will fall by 7% for new installations after 2 years, the rate given in the first year of install will continue for the lifetime of the tariff.

What is the Feed-In Tariff scheme?

How does the Feed-In Tariff scheme work?

Is it possible to make money from the Feed-In Tariff scheme?

What sources of renewable energy generation does the Feed-In Tariff scheme cover?

If you've already got a solar panel/wind turbine etc - can you be part of the scheme?

What about renewable heat generation - is that covered?

What is the Feed-In Tariff scheme?

The Feed-In Tariff scheme (also known as FITs or the Clean Energy Cashback scheme) means that people who generate their own green or renewable energy will be paid for doing so. It's a new government initiative which is hoped will encourage more people to start generating their own power. Feed-In Tariffs are already popular across Europe - in the Netherlands, for example, 40% of its electricity is generated through similar schemes. Currently, the UK only gets about 5.5% of its electricity from renewable sources and the Feed-In Tariff scheme could help to increase this percentage.

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How does the Feed-In Tariff scheme work?

1.You install solar panels or a wind turbine etc and start generating your own renewable energy.
2.You use the 'free' electricity you generate in your home, get paid for every unit you generate and buy any extra energy you need from your energy supplier.
3.You sell any extra electricity you're producing to the National Grid. The amount you get paid for the electricity you generate will depend on what energy source you are using. To try and get as many households as possible to join in, the government will pay a higher long term tariff rate to people who install their solar panels etc in the first year of the scheme (1st April 2010 - 31st March 2011) than for those installed later on. Tariffs are index-linked which means they will track market prices and, depending on the type of technology you use to generate electricity, this is guaranteed for up to 25 years.

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Is it possible to make money from the Feed-In Tariff scheme?

Yes. As well as cutting your electricity bills, you can earn a significant amount of money from the energy you generate. For example: An average household uses around 4,500kWh of electricity a year, costing about £585. They install solar panels which generate 2,000 kWh of electricity, and get paid 21p a unit, or a total of £826. They use half of the electricity they generate or 1,000 kWh (remember that the time they need to use the most electricity might not be the time when they are generating the most, so they would still have to buy electricity. On the flipside, they would have surplus to sell on at other times), which cuts £130 off their electricity bill. They sell the other 1,000 kWh of electricity they generate at 3p a unit and make £30. So, the household will cut their electricity bill to £455 (£585-£130) and make £856 from their energy (£826 plus £30), meaning a total income of £986 from the Feed-In Tariff scheme in one year. If we assume that the solar panels cost a total of £12,500 to install, then this is a 7.8% return on their investment. This calculation comes from Feed-in Tariffs: Government's Response to the Summer 2009 Consultation. The exact level of profit you could make depends on a number of different factors, including: How you cover the cost of installing your chosen method of harvesting renewable energy - if you have to borrow the money, you could find that the rate of interest you're paying on your loan is higher than the return you're getting. What source you're using to generate electricity - some methods will be paid at a higher rate than others. Where you live and what your weather is usually like - for example whether you live somewhere, windy, rainy, sunny, or near a good source of hydro-electric power will have an impact on how much power you can generate.

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What sources of renewable energy generation does the Feed-In Tariff scheme cover?

Wind power, Solar or Photo Voltaic power Hydro Anaerobic digestion - plant and animal material is broken down by bacteria, which produces methane, which can then be used to generate energy. Domestic Micro Combined Heat and Power (CHP) - this produces both heat and electricity from one process, and it a more efficient way of using both fossil and renewable fuels.

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If you've already got a solar panel/wind turbine etc - can you be part of the scheme?

Yes. The Feed-In Tariff scheme doesn't just apply to new installations. If you've installed a way of harvesting one of the kinds of renewable energy listed above since July 2009, you can join the scheme. If you started generating your own electricity before July 2009, you can also be part of the scheme, but at a lower tariff rate.

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What about renewable heat generation - is that covered?

The generation of renewable heat through things like ground source heat pumps, biomass boilers and air source heat pumps is not covered by the Feed-In Tariff scheme. However, the DECC (Department of Energy and Climate Change) has announced that from April 2011, there will be incentives for renewable heat generation.

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