Feed-In-Tariff scheme (FITs)
As part of its commitment to the EU to source 15% of its energy from renewable sources by 2020, the UK Government introduced FITs effective from 1st April 2010
FITs are a per-unit support payment specifically targeted at small-scale low-carbon electricity generation, up to a maximum limit of 5 megawatts (MW) capacity
THE FIT SCHEME IS CURRENTLY UNDER REVIEW. ANY CHANGES WILL BE EFFECTIVE FROM APRIL 2012 UNLESS THE REVIEW REVEALS A NEED FOR GREATER URGENCY
Key features of FITs:
- A guaranteed payment from your electricity supplier for every kWh (unit) generated (the ‘generation tariff’)
- The FIT participation will have a 20/25 year (for wind and solar respectively) limit – ie a generator will receive the FIT for a guaranteed 20/25 years
- Generators will be able to off-set against power they would otherwise have had to buy
- In addition to the generation tariff a generator will receive a guaranteed minimum payment for every unit exported (the ‘export tariff’). The minimum payment is set at 3p/unit (RPI linked – 2011: 3.1p/unit)
- The electricity qualifying for export tariff can either be measured by means of an export meter or most large electricity suppliers offer a 50/50 scheme where it is assumed that 50% of all electricity generated will be exported to the grid
- The tariff will be reduced at a predetermined rate per year known as ‘degression’. The payments and level of degression for the next 5 years is set out in the table below. The level of payment will remain at the figure applicable when the turbine was installed. The degression is based on the concept that those investing in renewable technologies in the future will benefit from lower prices
- Generation & export tariffs will be linked to RPI
PAYMENT LEVELS AND TERMS STATED IN THE TABLE BELOW MAY CHANGE FOLLOWING THE FIT REVIEW & RPI ADJUSTMENT
| Technology & scale | Tariff level for new installations in period (p/kWh) | |||||
|---|---|---|---|---|---|---|
| 01/04/10 –31/03/11 | 01/04/11 -31/03/12 | RPI adjusted | 01/04/12 -31/03/13 | 01/04/13 -31/03/14 | 01/04/14 -31/03/15 | |
| Wind – >1.5 – 15kW | 26.7 | 26.7 | 28.0 | 25.5 | 24.3 | 23.2 |
| Wind – >15 – 100kW | 24.1 | 24.1 | 25.3 | 23.0 | 21.9 | 20.9 |
| PV – <4kW (new build) | 36.1 | 36.1 | 37.8 | 33.0 | 30.2 | 27.6 |
| PV – <4kW (retrofit) | 41.3 | 41.3 | 43.3 | 37.8 | 34.6 | 31.6 |
| PV – >4 -10kW | 36.1 | 36.1 | 37.8 | 33.0 | 30.2 | 27.6 |
| PV – >10 -100kW | 31.4 | 31.4 | 32.9 | 26.7 | 26.3 | 24.0 |
- The payments are made by the generator’s electricity supplier
- Technologies must be certified under the Microgeneration Certification Scheme (MCS) and must be installed by an MCS certified installer
- Multi installation sites (ie more than one turbine) will be eligible but the capacity of the site will determine the banding for the FIT
- Income tax – Exemption for domestic installations where export not excessive
- Generators may assign FITs to a third party
