Feed-in tariffs

Feed-in tariffs

Introduction

The Feed-In Tariffs (FITs) programme, launched by the government on April 1, 2010, and open for applications until April 1, 2019, aimed to accelerate the adoption of renewable and low-carbon electricity generation technologies, such as solar panels and wind turbines. This visionary initiative mandated electricity suppliers to provide fixed generation and export fees.

FIT beneficiaries

The FIT scheme catered to renewable energy enthusiasts and encompassed:

  • Solar photovoltaic (solar PV) Systems
  • Wind Turbines
  • Micro combined heat and power (CHP)
  • Hydro Power Systems
  • Anaerobic Digestion (AD)

The system capacity limit was 5MW, with CHP capped at 2kW.

Understanding FIT Payments

FITs offered favorable energy tariff/payment streams for homeowners embracing renewable technology:

  1. Generation Tariff: Compensation for every unit (kWh) of electricity generated.
  2. Export Tariff: A fixed rate for each unit (kWh) of electricity exported back to the grid.

This setup not only promoted savings through sustainable energy but also generated tax-free income. FIT payments were distributed quarterly by energy suppliers, starting from eligibility. Calculations were based on meter readings provided to energy suppliers (FIT licensees).

In contrast to the Smart Export Guarantee Tariff, FIT rates were government-set, ensuring uniform compensation across energy providers. Changing FIT licensees was easy, with numerous companies participating in feed-in-tariff payments.

Feed-in tariff payments could span up to 20 years, or 25 years for enrollees before August 2021. Queries could be directed to FIT licensees or Ofgem.

Administration and Transition

The FIT scheme was a government-led effort overseen by the Department for Business, Energy, and Industrial Strategy (BEIS), administered by Ofgem. From April 1, 2019, the FIT scheme closed to new applicants, succeeded by the Smart Export Guarantee (SEG) scheme. Existing eligible participants continued receiving FIT payments without disruption.

Transitioning to SEG: Considerations

Transitioning to the Smart Export Guarantee Tariff required thoughtful evaluation. Unlike FIT payments, SEG tariffs varied among energy suppliers (3-5p/kWh). It was wise to compare with the FIT export tariff; retaining FIT could be advantageous if it was higher.

FIT export payments were “deemed,” compensating for 50% of generated electricity regardless of export amount. This approach might be more favorable than SEG’s precise export value-based payment. SEG applicants indicated their FIT export payment status.

Embracing sustainability

FITs made a significant impact, with 860,000+ accredited Solar Photovoltaic installations (5,126,576 kW) in the UK, fostering the transition to sustainable energy at home.

For those missing the feed-in tariff deadline, the door to sustainable energy via Solar PV remained open with the Smart Export Guarantee. Deege Solar, an expert MCS-accredited Solar Panel Installer, empowers homeowners towards greener living.

Conclusion

In conclusion, Feed-In Tariffs initiated a renewable energy shift. While the FIT scheme evolved, its legacy continued. With options like the Smart Export Guarantee, homeowners contribute to sustainability. Deege Solar guides this journey to a brighter, greener future. Shape change alongside Deege Solar for a sustainable world.