What are Feed-In Tariffs?

Feed-In Tariffs are payments to ordinary energy users for the renewable electricity they generate.

Feed-In Tariffs were first introduced in Germany in the 1990s. They proved very successful and have made Germany one of Europe’s leading markets for wind and the best solar photovoltaics market in the world. Tariffs are now widely used in Europe and the prices have come down as the market has expanded and costs have fallen.

Feed-In Tariffs (also known as FITs) are the electricity part of what some people call Clean Energy Cashback, a scheme that pays people for creating their own "green electricity". The second part of the scheme is the Renewable Heat Incentive , a similar measure for heat.

The tariffs have been introduced by the Government to help increase the level of renewable energy in the UK towards our legally binding target of 15% of total energy from renewables by 2020 (up from under 2% in 2009). 

What are the Financial Benefits?

• The government pay you a fixed rate for all the electricity you produce, even if you use it yourself.
• If you export any electricity to the grid you will be paid an additional bonus payment.
• Your standard electricity bill will be reduced as you are using energy produced yourself.

Who are they for?

Virtually every property in England, Scotland and Wales can make money from renewable energy, whether it's a home, business, school, hospital or farm.

The FITs are for just about everyone, including households, landlords, businesses and even organisations such as schools and care homes.

What renewable energy systems are eligible?

Renewable generation systems up to a capacity of five megawatts are eligible under the new Feed-In Tariffs scheme. This is a lot of power, so all households and the vast majority of businesses wishing to install renewable energy systems are therefore eligible.

Do they cover heating?

No; that will be covered by the Renewable Heat Incentive

Will I have to pay tax on the tariff?

Tariffs will be exempt from income tax. This means that domestic users and other income tax payers will not be taxed for any income received from the Feed-In Tariffs or Renewable Heat Incentive.

Companies will be subject to Corporation Tax on their tariff income but will be able to obtain relief on the cost of the systems as for other capital assets.