Feed In Tariff (FIT)

Put simply the Feed In Tariff or its commonly used abbreviation FIT is a charge on all business electricity customers to reward, compensate and benefit those customers who have access to their own generation and who therefore take pressure and reliance off the main generating grid.

It is related to, but not the same as the Renewable Heat Incentive (RHI)

The monies collected via electricity bills are recycled by energy suppliers and used to reward businesses with what is known as ‘embedded generation’.

This may sound grand or complex however it can be as simple as having a solar panel fitted to the roof of your premises.

The government scheme that underpins FIT was launched in April 2010 in order to “encourage the uptake of small-scale renewable electricity generation”.

The FIT concept is part of a number of protocols, initiatives and policies that successive governments have brought in to fulfil the obligations they face from over-arching EU environmental legislation.

The beauty of the FIT scheme is that following initial investment, not only will you be saving money by generating your own electricity, you’ll also get paid for the electricity you generate (a generation tariff) and if you generate more than you need you could be paid for ‘spilling’ that energy back into the ‘grid’ (an export tariff).

So:

• You’ll be paid for each kWh of electricity you generate, even if you use it yourself, this is known as the Generation tariff, which although dependent on the energy source used, is a set rate for each unit generated, index linked and guaranteed for the period of the tariff (up to 20 years);

• You’ll be paid for any surplus kWh of electricity you export to the grid, this is known as the Export tariff, and is a uniform p/kWh payment regardless of energy source used; and

• You’ll save money on your electricity bill, because you’ll be using your own electricity!

Organisations, such as the energy suppliers, can apply to be Feed In Tariff Licensees, others are mandated to do so, as a result eligible customers can always be sure that they have a ready market and a compensatory framework through which the potential rewards can be delivered.

Firstly your premise or premises will need to have an eligible renewable energy generation source installed.

Eligible sources include:

• Solar panels (roof mounted or stand alone)
• Wind turbines (building mounted or free standing)
• Hydroelectricity
• Anaerobic digesters
• Micro combined heat and power (CHP)

These can be further segmented into Photovoltaic sources (PV) and non-photovoltaic sources (non-PV).

• Your generation address will need to be registered with and recognized by the Post Office.
• Your premise’ generation capacity will need to be less than 5MW.
• Your installation and installer must be certified under the Microgeneration Certification Scheme (MCS) or it if is hydro or anaerobic digestion this will be subject to the ROO-FIT process.
• You’ll need the installer to have registered the install on the central MCS database and to have received a certificate of MCS compliance from them.

Once the equipment is commissioned for use on your premise, you will need to approach a FIT Licensee so that you can be officially registered on the Ofgem Central FIT Register in order to be eligible to receive any applicable generation and export tariff payments from your FIT Licensee.

As part of this process you should contact Business Juice to help you select the best FIT Licensee for your needs.

Once identified you will need to provide your chosen FIT Licensee with the MCS compliance certificate, the application form (including MCS number), the meter reading(s) taken on the day of application submission, proof of ownership for the generation equipment on site i.e. copy of Final Paid Invoice, any required signed declarations and where applicable the EPC for your premise.

Despite having done this there is still more to do to receive your incentives.

Your eligibility date will need to have been agreed and for Solar installations your premise’ Energy Performance Certificate (EPC) rating will need to be evaluated.

Your eligibility date will be the date your FIT Licensee receives a valid application for FIT recognition. This will more than likely be after the date on which your renewable electricity system is installed. The only departure from this process is for Solar installations, where these are additions to an existing system, the eligibility date will be the date of commissioning and not the date of any subsequent application.

Crucially you will only be paid for the energy you generate from the meter reading taken on the eligibility date.

The EPC plays an important role here too for Solar installations, the EPC, which must be dated prior to the commissioning date must be submitted with your application. If you fail to provide the relevant EPC or the EPC rating is below D you will receive the reduce tariff rate for your FIT award.

As a result it is therefore a crucial part of the process to efficiently complete the administration process that supports the FIT scheme.

Once all this is done, your premise will be ready to receive the compensatory tariffs from your energy supplier.

The Export tariff:

The generation tariff for Solar PV:

Solar generation tariffs are reviewed every 3 months however once agreed they are guaranteed for the recipient for 20 years.

For Solar PV that fails the EPC rating the uniform payment is 6.16p/kWh.

For systems with installed capacity in excess of 30kW an export meter will need to be fitted in order to more accurately measure the volume spilt onto the network.

The generation tariff for non-Solar PV – sources such as Hydro, Wind and Micro CHP:

Hydro and Wind installations generation tariffs are guaranteed for 20 years and 10 years for Micro CHP.

Currently, for eligibility dates from 1 April 2014 to 30 September 2014 the generation tariff rates are:

Hydro generating station with total installed capacity of 15kW or less

Hydro generating station with total installed capacity greater than 15kW but not exceeding 100kW

Hydro generating station with total installed capacity greater than 100kW but not exceeding 500kW

Hydro generating station with total installed capacity greater than 500kW but not exceeding 2MW

Hydro generating station with total installed capacity greater than 2MW

Wind:

Wind with total installed capacity of 1.5kW or less

Wind with total installed capacity greater than 1.5kW but not exceeding 15kW

Wind with total installed capacity greater than 15kW but not exceeding 100kW

Wind with total installed capacity greater than 100kW but not exceeding 500kW

Wind with total installed capacity greater than 500kW but not exceeding 1.5MW

Wind with total installed capacity greater than 1.5MW

Micro CHP:

Combined Heat and Power with total installed electrical capacity of 2kW or less (tariff only available for 30,000 units)

For systems with installed capacity in excess of 30kW an export meter will need to be fitted in order to more accurately measure the volume spilt onto the network.

Anaerobic Digestion:

Anaerobic digestion with total installed capacity of 250kW or less

Anaerobic digestion with total installed capacity greater than 250kW but not exceeding 500kW

Anaerobic digestion with total installed capacity greater than 500kW