Guide to Feed in Tariffs
What is a feed in tariff?
A feed-in tariff (FiT) is a payment system that encourages the use of renewable energy, mainly solar PV systems. It allows individuals and businesses to earn money for the electricity their solar systems generate and send back to the grid. Typically, participants receive a set payment for each unit of electricity produced. FiTs help create a reliable income from renewable energy, making solar technology more appealing for homeowners and businesses, while also supporting efforts to lower carbon emissions and improve energy sustainability.
How do feed in tariffs work?
Installation: To qualify for FITs, you need to install an eligible renewable energy system, typically a solar panel system (PV).
Generation: The FIT scheme pays you based on the amount of electricity generated by your system, measured in kilowatt-hours (kWh), regardless of whether you use it or export it back to the grid.
Registration: You must register with the FIT scheme, which includes submitting details about your installation, like the type of technology and capacity.
Payment Structure: Payment is usually broken down into two components:
Generation Tariff: This is the main payment based on how much electricity your system generates.
Export Tariff: Additional payments for any electricity that you export to the grid, which is often an estimated amount (usually around 50% of what you generate).
What equipment do I need?
Solar Panels: These devices convert sunlight into electricity. You will typically need a solar PV system installed on your roof or property.
Inverter: This equipment transforms the direct current (DC) electricity generated by the solar panels into alternating current (AC) electricity, which is used in homes and businesses.
Metering Equipment: To measure the amount of energy generated, you will need a generation meter that records the total output from your solar system. An export meter may also be required to track the amount of electricity sent back to the grid.
Mounting and Wiring: Appropriate mounting systems and wiring are needed to safely secure and connect the solar panels to your inverter and the electrical supply of your property.
Battery Storage (Optional): While not necessary to qualify for FITs, solar battery storage allows you to store excess energy generated for use during non-sunny periods, optimising your energy usage and savings.
At The Skill Group, we provide personalised quotes for all equipment tailored to meet your specific needs and perfectly suited for your home.
Smart Export Guarantee (SEG):
The SEG (Smart Export Guarantee) replaced the FiT (Feed-in Tariff) scheme for new entrants after its closure in March 2019.
- Under the SEG, renewable energy generators receive compensation for excess electricity exported to the grid.
- Unlike FiT, SEG does not have a fixed rate; individual export tariffs are determined by energy suppliers and can vary based on market conditions.
- Participants must have a smart meter installed to measure and record their energy exports accurately.
What is the difference between a feed in tariff and the SEG?
The Feed-in Tariff (FiT) and the Smart Export Guarantee (SEG) are two different schemes designed to promote renewable energy generation in the UK, but they operate in distinct ways.
Feed-in Tariff (FiT):
The Feed -in Tariff (FiT) scheme promotes small-scale renewable energy generation.
- It allows homeowners and businesses to earn payments for electricity generated from renewable sources, particularly solar panels.
- Participants receive a fixed payment for each kilowatt-hour (kWh) generated.
- Payments are made regardless of whether the electricity is consumed on-site or exported to the grid.
- The scheme provides guaranteed income over a specified period.
In summary, the FiT provides a stable income for all generated electricity over a fixed term, while the SEG focuses on compensation for exported electricity at a rate determined by individual suppliers, allowing for more flexibility in how these payments are structured.
Considering solar? Our experienced team will work with you to assess your property, design a customised solar panel system to suit you and handle the installation with precision and care. To get your your free personalised quote, please fill out the form below!
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