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   Feed-in-Tariffs (FITs)

In April 2010, the UK Government launched its Feed-in-Tariff (FITs) scheme. FITs are payments to ordinary energy users for the renewable electricity they generate. Sometimes called ‘Clean Energy Cashback’, the scheme is designed to help increase the level of renewable energy in the UK.

What is FITs

With FITs, anyone who  has an eligible Solar PV system installed will receive:

  • a guaranteed fixed payment for generated electricity, including the electricity that they use. This payment is guaranteed for a 25 year period.
  • an extra payment for any electricity that isn’t used and which is fed back into the National Grid.
  • a benefit from reduced electricity bills as they become their own electricity generators and don’t need to draw as much electricity from the grid itself.

What’s the catch?

Here’s the good news……………..there isn’t one!

How much can I earn and how much will I save?

  • You can expect to receive around £1,000* each year for generating your own electricity
  • You can expect to receive around £25* each year for exporting excess energy back to the grid
  • You could save up to 50%* of your energy bill each year

…AND it get’s even better!

  • The payments are guaranteed for 25 years
  • The payments you receive will be index-linked (RPI), which means that as inflation rises so does your payments
  • The payments are TAX-FREE which gives a yield of around 8%* for basic rate taxpayers, 15.6*% for 40% taxpayers and 18.2%* for 50% taxpayers

*based on the average home – Energy Saving Trust – Feed-in Tariffs

Who pays the Feed-in Tarriffs payments?

The payments are made from your electricity provider, e.g. Eon, EDF, British Gas. They can make the payment as a direct payment into your bank account or alternatively you can chose to have it paid as a credit against your own energy bills. Whilst the FITs payments are a government incentive for renewable energy, the actual fund set up to pay those who have the renewable energy systems installed, is funded by the different electricity supplier and is based on the proportion of the UK that they supply. The suppliers recover this cost through an increase in electricity bills to standard consumers, although this is estimated at only £3 extra per bill by 2016. So it makes sense to beat the electricity suppliers at their own game, Get them to pay you the FITs payments and reduce your own electricity bill at the same time!


  • the Government will reduce the tariff levels from April 2012, as the expected uptake of Solar PV and other renewable technologies increases
  • by installing your Solar PV panels now you fix your tariff levels for the next 25 years
  • with the increase in VAT from January 2011, you would be saving yourself valuable money on both the installation costs and your energy bills

Useful FITs Weblinks

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