get paid to produce green energy
The feed-in tariff is the government program that buys excess renewable energy generated by UK households.
What is the feed-in tariff?
The feed-in tariff scheme, often referred to as FiT, was introduced in 2010 to encourage UK households to invest in renewable energy production methods such as solar panels and micro-CHP.
With the Feed-in Tariff program, those who produce their own green electricity will be paid for doing so by reselling it to the grid via their energy supplier.
What type of technology is eligible for the guaranteed feed-in tariff?
Only certain methods of power generation are eligible for Fit. These include:
- Wind power
- Solar energy (the most popular method in the program)
- Photovoltaic power
- Hydroanaerobic methanization (plant and animal matter is broken down by bacteria, which produce methane which can then be used to produce energy)
- Combined micro heat and electricity (CHP) (this produces both heat and electricity from a single process)
How much does the feed-in tariff cost?
The FiT program pays the rates set by Ofgem, revised and published every three months.
The most recent FiT rates for all generation methods can be viewed and downloaded here
It should be noted that recent government changes mean that renewable energy systems installed after January 1, 2016 will be paid at a significantly lower FiT rate than those installed before that date.
Another change to this program is that it pays for 20 years instead of 25. This change, coupled with the lower payout rate, means that solar panel systems in particular (the most popular method under the program ) will take longer to pay themselves.
How it works?
The FiT program works in three stages:
- Install qualifying technology such as solar panels in your home.
- Use the electricity produced by your system and sell the excess energy back to the grid through your energy supplier.
- Your supplier arranges payments based on the rate agreed upon at the time of installation and your method.
Can I still change energy supplier if I receive feed-in tariff payments?
Yes. And, depending on the provider, you may be able to keep your FiT provider the same, but change your mains power provider. This can be useful if your new supplier is not an approved feed-in tariff provider.
(Just remember that changing your electricity supplier only impacts your monthly energy bills for the energy you use; your FiT tariffs are set by Ofgem, not by the supplier that handles the payment.)
But, if you want to change your FiT provider, they must be authorized to provide this service. For the most part, approved feed-tariff electricity providers fall into two categories:
- Mandatory Licensees – Suppliers with more than 250,000 customers must be part of the buy-back tariff regime and are required to make payments to eligible persons. All six major energy suppliers will be included in this group.
- Volunteer Licensees – vendors who have fewer than 250,000 customers but choose to support the program and make payments to eligible people. These are usually small suppliers who support greener energy as part of their business model.
The most up-to-date list of suppliers that support the feed-in tariff can be found on the Ofgem website.