What are the Feed-in Tariffs (FiTs)?

Feed-in tariffs are a government-funded scheme set up to incentivise homeowners to generate electricity via renewable means. In a nutshell, you’ll have a tax-free income paid by the government for any electricity you generate from your solar PV panels. But before applying for the FiT, there are a few things to consider.

Firstly, to be eligible for the feed-in tariff, your solar array must have been installed by an MCS-registered installer. Secondly, Feed-in Tariffs are based on electrical renewable installations, so solar thermal panels aren’t eligible (solar thermal panels are eligible for government funding through the Renewable Heat Incentive however – click here for more info (Link to FI1)).

The tariffs have decreased in value over time and are frequently revised, usually about once or twice annually. This is known as ‘degression’, and this occurs across all financial incentives for renewables including the RHI.

The tariffs have decreased in value over time and are frequently changed, usually about once or twice per year. This is known as ‘tariff degression’, and it occurs across all financial incentives for renewables in order to balance the budget as the number of people receiving quarterly payments increases.

The current rates are as follows:

Generation rate – 4.14p/kWh           (payment for generating electricity)
Export rate – 5.03p/kWh               (payment for exporting surplus electricity back to the grid)

These tariffs are payable over 20 years except for installations fitted prior to 1st August 2012, which are payable for 25 years. Once your installation is fitted, your tariff rate remains fixed at that rate for the duration of the payment contract. The tariffs are linked to the Retail Price Index (RPI) so can increase slightly over time with inflation.

Installations must be installed and signed off by an MCS-registered installer, and you must inform your local Distribution Network Operator (DNO) about the installation so they know that there is a new self-generating unit on their grid. Your installer should be able to help you to inform the DNO and apply for tariffs if you need assistance (Link to FI4).