How the UK Feed In Tariff Works

Introduction

The UK Government introduced a system of feed-in tariffs (FITs) to encourage small scale, low carbon electricity generation. Effective from April 2010 the new UK FITs (also known together as the Clean Energy Cashback scheme) are expected to "trigger a small scale electricity revolution".

The feed-in tariffs consist of two elements of payments made to generators of renewable energy and paid for by electricity suppliers. The largest suppliers are obliged to offer FITs and smaller suppliers may participate if they wish.

The first element is the generation tariff that is paid for every kilowatt hour (kWh) of electricity that is generated and recorded via a generation meter. The generation tariff will be paid regardless of whether the electricity is used onsite or exported to the national grid.

The second element is an export tariff which is paid for any excess electricity that is exported back to the grid. We negotiate the price for this exported electricity with your electricity supplier. This export tariff along with the generation tariff is how we get our return on investment.

All payments for this are paid to us by your electricity supplier.

To be eligible for the FIT scheme, all wind power projects of 50kW or less must use Microgeneration Certification Scheme (MCS) products and MCS accredited installers. The Gaia 133 wind turbine and Mosscliff Environmental are all MCS approved.

You can find out more from the Department of Energy and Climate Change response to the Summer 2009 Consultation (PDF, opens in new window).