Feed in tariffs are a UK government sponsored incentive scheme designed to encourage the introduction of renewable energy sources.

Under feed in tariffs, an obligation is imposed on regional or national electricity utility companies to buy renewable energy electricity.

The feed in tariffs scheme covers several electricity generating technologies up to 5 Mega Watts: Solar PV (photovoltaics), Wind Power, Hydro Electric, micro CHP (Domestic Scale – with a capacity of 2kW or less) and Anaerobic Digestion.

Feed in Tariff levels vary depending on the scale of the installation.

Power generated will be used by the property thereby reducing the electricity bills. If more power is generated, the surplus will be exported to the National Grid and the electricity supplier will be paid for the excess.

If the power generating potential is greater than that necessary to generate electrical power for a single dwelling then benefits can be achieved by communities grouping together to increase buying power.

Before investing in renewable or low carbon energy systems it is important to make sure the building is as energy efficient as possible, so that the energy generated is not wasted.

The amount of money you save will be dependent on the amount of electricity that you generate and how you use this electricity in the home.

The feed-In tariff is a ‘premium tariff’ which means that generators will be paid the FIT rate (p/kWh) for their total generation but will also be able to ‘sell’ any electricity they export back to the grid.

Customers will recieve a guaranteed export payment of 3p/kWh.

This is designed to encourage generators to use the electricity they generate within their home so they can benefit further from reducing the need to purchase electricity from a supplier.

The below table provides examples of the savings that you could make by installing solar PV panels:

Feed-in tariff Scenario

(Standard domestic tariff price for Midlands distribution area as of 31st March 2009.)

Prices provided are ‘follow-on unit rates’.

Feed-in tariff Scenario

Please note that savings provided above are for customers installing after 15 July 2009. All existing customers registered for the Renewables Obligation before this date will be subject to different FIT rates.