Feed in Tariffs
Feed in Tariffs (FITs) are the money that is paid for the production of electricity from non carbon sources.
As a producer of electricity from a certified installation of a renewable energy source FITs pay you for every unit of electricity that you produce.
Feed in Tariffs are designed so that renewable energy installations make a viable return on their capital cost.
Feed in Tariffs:
- vary from technology to technology
- are guaranteed for 20 years or longer
- are index linked
- are tax free
This means that you get paid for the electricity that is produced, regardless of where it goes. If you consume this electricity, then you are saving the cost of buying it from the grid. If you export to the grid then you get a further 3p per unit.
How does this work in reality?
We have used a wind turbine as an example, but the principle applies for all technologies.
Assume that:
- You produce 7,000 units of electricity per annum from a wind turbine
- You consume 6,000 units and export 1,000 units
- You pay 12p per unit of electricity from the grid
FITs pay 28p per unit for electricity produced from a wind turbine of this size.
So:
| Electricity consumed | Financial Benefit |
| 6,000 units @ 28p / unit (Feed in Tariff) | £1,680 |
| 6,000 units @ 12p / unit (saving from not buying from grid) | £720 |
| Electricity exported | Financial Benefit |
| 1,000 units @ 28p / unit (Feed in Tariff) | £280 |
| 1,000 units @ 3.1p / unit (Export Tariff) | £31 |
| Total income/saving | £2,711 |
The Feed in Tariffs by technology and size
| Energy Source | Scale | Generation Tariff (p/kWh) | Duration (yrs) |
| Anaerobic digestion | <250kW | 14 | 20 |
| Anaerobic digestion | 250-500kW | 13 | 20 |
| Solar PV | <4 kW new | 21 | 25 |
| Solar PV | >4-10kW | 16.8 | 25 |
| Solar PV | 10-50kW | 15.2 | 25 |
| Solar PV | 50-150kW | 12.9 | 25 |
| Solar PV | 150-250kW | 12.9 | 25 |
|
Solar PV |
250-5MW | 8.5 | 25 |
| Wind | 1.5-15kW | 28 | 20 |
| Wind | 15-100kW | 25.3 | 20 |