Feed-in-Tariff Scheme

1. What is the feed-in tariff and how does it work?

It's a financial incentive backed by the Government and paid by your energy company to generate your own clean electricity. An average three-bedroom home will earn up to £259 a year by generating its own solar electricity - and that's on top of the likely reduction of £304 from the household electricity bill. You can earn a fixed income for every kilowatt hour of electricity you generate and use in your property. And you can also earn an additional fixed income for every kilowatt hour of electricity you generate and sell back to the grid. The income is guaranteed for 20 years (for solar pv systems) and index-linked. When you need to use electricity at night (when it is dark you won't be able to generate enough electricity from solar technology), you can still buy your electricity from your utility company, but you will need to use much less than usual. If you want to make the most of solar technology - and to save even more on your electricity bills - try to become as energy efficient as you can; for example, run electrical appliances like your washing machine and dishwasher during the day. If you invest in solar energy now, you will be guaranteeing that income for the next 20 years. OFGEM will administer the feed-in tariff scheme and energy suppliers will be responsible for payments to their customers.

2. Why is the Government introducing the Feed-in tariff?

The Government wants to build the market for clean energy. The Feed-in tariff is an incentive for households, businesses, local authorities, farmers and landlords to start generating their own energy, which allows them to protect themselves against future price rises of fossil fuels, cut carbon emissions and receive payment for the low-carbon energy they produce. By doing so, they are investing in a low-carbon economy for the future.

3. How do I apply for the Feed-in tariff?

You can apply for the Feed-in tariff from your electricity supplier from 1 April 2010.

4. Who pays me for the feed-in tariff?

The energy suppliers pay the feed-in tariffs to those who generate the clean electricity. When you apply for the feed-in tariff, you should ask your energy supplier how and when payments will be made. Payments must be made at least quarterly.

5. Where does the money come from?

The money to pay the producers of green energy comes from a small levy on every UK energy consumer.

6. When did the feed-in tariff start?

It started on 1 April 2010.

7. How long do the feed-in tariffs last?

For solar electric (Photovoltaic’s - PV) systems from Solar PV Energy limited, the tariff lasts for 20 years. For most other technologies, it's 20 years. The tariffs are index-linked and guaranteed. Tariffs will be reviewed every year. The amount new applicants receive and the duration of the tariff may change. It's likely to be at its highest now.

8. Are the FIT rates really guaranteed for the full 20 years? Can future governments back track on them?

The Feed-in tariff is Primary Legislation, and it would be a breach of the Governments contract if it didn't last for 20 years. Payments to individuals will not change over this time - in fact they will increase with inflation.

9. Why should I invest now? Will the costs come down?

It's unlikely that the technology costs will become cheaper quickly; and the Feed-in tariff is structured so that you're likely to get the highest benefits now. The feed-in tariff will be reviewed every 3 months. Please see item 7. So now really is the best time to invest.

10. With so much controversy over the science of climate change, do we really need to be making these changes to how we buy, use and generate energy?

Controversy or not, the fact remains that the world is running out of oil and security of supply is going to be a real issue. We urgently need to find other, renewable ways of sourcing energy and the Feed-in tariff will help build a market for renewable energy. It's saying to UK householders, businesses, local authorities, landlords and farmers: "Now is the best time to invest in clean electricity".

11. Is the FiT paid from the date the system was installed on the roof or the date the system is commissioned?

The FIT would start from the date of commissioning.

12. What about people in rented accommodation?

We know that lots of Housing Associations and local authorities are interested in using the Feed-in tariff and solar electricity to earn money, save energy and pass some of those benefits on to their tenants. Solar PV Energy limited are currently working with Housing Associations. And as for private landlords, it makes sense too: it adds value to their properties, it makes them money and it's good for their tenants.

13. How much will I earn from solar electricity?

A typical 4kW well-sited solar installation could offer you payments of up to £259 and save you £304 a year on your electricity bill.

14. What if I move house?

If you get solar installed and start claiming the 'Feed-in Tariff' you will have lower bills and a steady income from the 'Feed-in Tariff' payments. These benefits can be transferred to the new home owner and so when you come to sell your home you can charge more for it.