Feed In Tariffs

The information site for the new guaranteed payments for renewable electricity in the UK

FAQs

When are the next FITs tariff cuts due?

Tariffs are now adjusted yearly (or quarterly for PV) in accordance with the degression schedule.

Earlier response to this question:

The cuts proposed in Phase 2A of the comprehensive review, were originally intended to take effect from 1st July 2012.

It now looks possible that they will be delayed until 1st August - see here.

Government policy is now disseminated on Twitter it seems!

Why did the Supreme Court refuse permission for the government to appeal?

The Court believed that the Appeal Court was correct in ruling that the government's attempt to change tariff levels retrospectively was unlawful.

It said:

Permission to appeal was refused because the application does not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court at this time, bearing in mind that the case has already been the subject of judicial decision and reviewed on appeal.

Why did the Appeal Court rule that the government’s proposed FITs changes were illegal?

The Court said the proposed change was effectively retrospective because (as summarised by the supreme court ruling):

The Court of Appeal upheld the Administrative Court's judgment that it is not within the power conferred on the Secretary of State by the Energy Act 2008 to reduce the tariff paid for electricity generated by small-scale solar photovoltaic generators, in respect of installations becoming eligible for payment prior to the coming into force of the modification.

This gives comfort that the government cannot change tariff levels applicable to systems installed before the new tariff levels have been approved by parliament.

What if I own more than one installation - will I be paid less?

Not unless you are in receipt of tariffs for more than 25 solar PV installations.  If that is the case, you will receive a lower tariff.  These lower tariffs are in the third column of the table linked here, and described in the footnotes to this table.

Does my property need to have a certain level of energy efficiency to be eligible?

Yes - but for solar PV systems only.  From 1 April 2012, the property to which your solar PV system is electrically connected (or attached) must have an Energy Performance Certificate rating of D or better.

Can I link to your website?

If you want to link to this website, be our guest.

If you want to gratuitously pilfer copy for your own website please note that our terms and conditions require you to do the decent thing and ask permission first!

What happens if I start earning the Feed-in Tariffs and then I move house?

 

A FITs registration is specific to a defined system in a specified location. It would lose eligibility if you dismantle the system and move it elsewhere.

In principle, therefore, when you move house, you have two choices.  The first is to sell the system along with the house to the new occupants, who would then receive the tariffs.  This is the most common option taken.

Alternatively you could in theory retain ownership of the system.  In this case, you could continue to receive the generation and export tariffs, but would have to reach agreement with the new occupants about leaving your system on their roof. As part of this arrangement, you would probably allow them to have the benefit of the free electrical generation.  This is a much less used option as it is difficult to set up legally.

What happens if I extend my system which is already receiving Feed-in Tariffs?

 

If the time that will have elapsed between the registering of your initial installation and the registering of your extension is less than 12 months, you will receive the tariff that prevails at the time of registration of your extension for the whole (combined) system.

If the elapsed time between registrations is more than 12 months, you will continue to receive the level of tariffs that the initial installation has always received.  As for your extension, this will receive the level of tariffs that prevails at the time of registration of your extension for the combined system size.

Why is the government limiting spending on the FITs - it’s not their money?

True - the FITs are paid for by electricity users.

However it has been decreed that any spending caused by government legislation may be treated as public expenditure.

The official government explanation was:

The Office of National Statistics (ONS) is the ultimate arbiter of whether a UK Government policy should be classified as tax and spend in the National Accounts. Such judgments are made independently of Government. ONS are guided internationally in their decisions, but in broad terms define mechanisms as taxes where they result in compulsory payments by an individual or organisation who does not receive a direct benefit in return. This is referred to as a “compulsory unrequited payment”. This may result in a policy being classified as a tax even where money does not flow through a Government account (because the outcome is similar to Government taking in then redistributing the money).

A well-established example is the Renewables Obligation, which requires energy suppliers to purchase Renewables Obligation Certificates (ROCs) from renewables generators, or to make payments to the buy-out fund.  Because energy suppliers do not receive a benefit in return, the payment they make is defined as a tax. The redistribution of these revenues (ie the revenue received by renewables generators for their ROCs) is defined as public expenditure.

The ONS decision to treat the Renewables Obligation as a tax is published at http://www.statistics.gov.uk/articles/economic_trends/ET635Gazely.pdf

Why are tariffs not available in Northern Ireland?

The primary legislation under which the tariffs were introduced is the Energy Act 2008.

This applied in Great Britain, but not Northern Ireland, because energy policy is a devolved power there, so regulated from Stormont not Westminster.

The Northern Irish administration would therefore need to legislate separately if it wants to introduce the schemes in Northern Ireland.

What is Microgeneration?

It is the production of heat or electrical energy at small scale.

This is defined in legislation as follows:

  • Electricity generation at capacities up to 50kW
  • Heat production at capacities up to 45kWth

What are the Renewable Energy Directive (RED) and Renewable Energy Strategy (RES)?

The RED is the directive adopted by the European Union in 2009 to increase the proportion of renewable energy produced in Europe.

Each country has its target for renewable energy in 2020 averaging 20% across the whole EU.

The UK has signed up to this directive with a national target of 15% of all the UK's energy to come from renewables by 2020. The way this will be achieved is set out in the National Renewable Energy Action Plan (NREAP) and the Renewable Energy Roadmap.

Why would the Spending Review look at tariffs?

The tariffs come from energy users not the Treasury, so are not 'public spending' as such.

However, it has been decreed (by the Audit Commission, we believe) that government must be mindful of the impact of any regulatory measure that has a financial impact on the public. Clearly the Tariffs legislation has added to the cost of energy bills, so this is something the Treasury can consider.

Free solar PV offers

 

Several companies are now offering to install solar PV for free on residential roofs where the homeowner would then receive free electricity while the company collects the tariff income. There are several pros and cons of taking up such offers as outlined by Consumer Focus.

 

Is it true, local councils are banned from selling electricity?

Yes it was, under the 1976 Local Government Act. However, DECC reversed this law in August 2010.

How easy is it to generate your own power?

Once you have your systems installed it is tremendously easy as your system will do everything automatically for you.

The more challenging bit is knowing what to install and how to do it. That is why we set up Ownergy!

Do I have to pay tax on my Tariff income?

It was announced in the Pre-Budget Report 2009 that the income from the Feed-In Tariffs will be free of income tax for householders who install systems primarily for their own use. See the details here. Similarly, it was announced in the March Budget that the Renewable Heat Incentive will also be Income Tax exempt.

Would we be able to apply for feed-in tariffs if we are not connected to grid?

FITs are payable for off-grid applications (though they obviously can't get the export bonus)... and we're a bit proud, because our managing director Philip Wolfe was instrumental in ensuring that they are.

However, if your system is DC, there's a major catch.

Will my existing renewable electricity system qualify?

Existing systems installed before 15th July will qualify only if they are under 50 kilowatts and registered for the Renewables Obligation (RO). See more about the legislation for existing systems on our page about installation dates.

Will the FITs apply in Northern Ireland?

No, the enabling powers in the Energy Act didn't extend to Northern Ireland. This is partly because Ofgem doesn't cover NI and partly because energy is devolved there (and often handled on an all island basis).

The Assembly are considering doing something similar - you'll need to lobby them.

Will the FITs apply in Scotland?

Yes FITs will apply in Scotland. The FITs legislation applies to the whole UK. The only differences compared to England and Wales would be in relation to other measures that are different in Scotland (such as grants) and how they might relate to the FITs.

Will the FITs apply in Wales?

Yes FITs will apply in Wales, and all the arrangements described on this website will apply equally in England and Wales.

Who pays for the Feed-in Tariffs?

The system is administered by the official regulator Ofgem, and uses money from a levy on all electricity sales, collected and distributed by the licensed electricity suppliers. Find full information on our page about funding.

Therefore if you install a renewable energy system you get a treble benefit:

  • Your income from the Feed-in Tariff
  • An extra income for every kWh you export
  • Because you are producing some of your own power, you will buy less electricity and therefore pay less for it

How long would I get this tariff for?

The Feed-In Tariffs will be paid for a period of 20 years from the date the system is first registered, except for solar photovoltaic systems installed before 1st August 2012, where the period is 25 years. If the system doesn't last that long, of course it will stop producing kilowatt hours and no tariff will be paid.

Read detailed information on our page about durations and variations.

How much is paid for each kilowatt hour?

This varies by type and size of system - see the tariffs table to find out more.

Does this only apply to electricity? What about gas? What about heat?

The Feed-In Tariffs apply only to electricity from low carbon sources. However a similar measure is being introduced in April 2011 to cover renewable heat and gas. This will be called the Renewable Heat Incentive and you can see more about it on the website of Renewable Heat Incentive Limited.

Is this the same as Green Tariffs?

No, green tariffs are offered by some licensed electricity suppliers when they are selling power sourced entirely or mostly from renewables. This will come mainly from larger scale centralised stations.

What is the Renewables Obligation? Are Feed-In Tariffs the same?

Feed-In Tariffs are separate to the Renewables Obligation (RO). The RO is a regulation which requires licensed electricity suppliers (the companies you buy your electricity from) to ensure that an increasing proportion of the energy they sell comes from renewable sources. The RO mainly supports larger scale centralised renewable generation such as landfill gas, hydropower and offshore wind-farms. The tariffs are intended for people and companies who install renewable generators mainly for their own use.

Why are they called ‘feed-in’ tariffs?

Good question! This sort of tariff was first introduced in Germany in the 1990s and it applied only to power which was 'fed in' to the electricity grid. The tariffs in the UK apply to all the electricity the system produces, whether it is used on site or fed in to the grid, so it’s actually a misnomer (they should really be 'production tariffs').

Do the Feed-in Tariffs apply to all types of renewable electricity?

The tariffs apply to many types of renewable electricity, though not all. There is a full list of all types included on our page about eligible energy sources.

What is renewable electricity?

It is power produced from a sustainable source such as solar, wind, or biomass. Electricity from fossil fuels like coal, oil and gas or from nuclear stations is not renewable.

What is the Microgeneration Certification Scheme (MCS)?

The MCS is a scheme to provide assurance to customers for domestic scale generation systems. It provides both for accreditation of installers and certification of products. For more information visit the MCS website.

It is also linked to the Renewable Energy Assurance Scheme (REAL Assurance), which provides protection against mis-selling and for other aspects of the system supply contract. For more information visit the REAL Assurance website.

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