How the Feed-In Tariff Scheme Works

The Feed-In Tariff Scheme is a new tactic implemented by the government in an attempt to promote cleaner, greener renewable energies in order to cut CO2 emissions and ease global warming. To try and achieve this, the government is offering a tariff for those who create renewable energies from their properties, be it businesses or homeowners. Renewable energy can be created by anyone in a number of ways, from solar panels to wind turbines.

Members of the public are rushing into action in order to take advantage of the scheme. Energy giant Npower have reported an 80 per cent uplift in solar PV enquiries with sales themselves at a record high. So why are people so keen to take advantage?

A primary reason will be financial, with a typical home having the opportunity to earn up to £1000 p/a. Also, with public interest in environmental issues ever growing, feed-in tariffs are proving a popular initiative.

How will you know if you are eligible for the scheme? Firstly, your device which produces renewable energy has to have been installed and certified by the government’s microgeneration certification scheme. Further to this, a number of technologies are accepted; solar energy, wind power, hydroelectricity, micro combined heat and anaerobic digestion.

Homeowners and companies wishing to install these devices or procedures into their property are recommended to contact a number of companies for advice. All large energy providers will be knowledgeable as to the nature of the scheme and the best way for you to get involved.

You can make the money in two ways; by generating electricity (the generation tariff) and by selling unused electricity back to the National Grid (the export tariff). The tariff varies dependent on when you installed your device, what type of device you have registered and how powerful it is.

For example, those operating a solar PV system fitted to an existing propoerty will be paid a rate of 43.3p per kWh their panels produce, with more powerful solar PV systems up to 10kW being paid a lower amount, at 36.1 kWh. To calculate the possible financial benefits a solar photovoltaic system could provide try Solar Guide’s Solar PV Feed-In Tariff Calculator.

So who pays the money? The government funds the tariffs themselves. Tariff digression will ensure the initiative remains financially efficient for the government, with proportionately smaller tariffs being paid into the future, as renewable technologies inevitably become cheaper. Whilst the government funds the money, it will be paid through the various utility companies involved in the scheme.

The scheme offers secure long term prospects for those wishing to benefit from it; with tariffs from solar powered energy guaranteed for the next 25 years and power generated from wind turbines guaranteed to be paid for the next 20 years. The scheme is due to be reviewed in 2013, when it is hoped the Feed-In Tariff will have already played a big part in motivating homeowners and companies to monitor their carbon footprint and create their own renewable energy for financial gain. The new government may play a large role in how the Feed-In Tariff scheme develops through the years, in line with environmental pressures and economic priorities.

One Comment

  • Luke 29th January 2011

    I live in a flat, so firstly I have no opportunity to benefit from the scheme and secondly I use less energy as flats are better insulated by virtue of being built in larger blocks than most houses.

    Why should I pay extra taxes to fund a money making scheme for those who are better off living in houses taking advantage of this scheme? Where’s my energy rebate for being greener?

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