The feed-in tariff system (FiTs) is designed as an incentive for energy producers to move away from conventional fossil fuels to renewable energy sources, it is government legislation which guarantees a fixed, premium rate for renewable electricity fed into the national grid. Power companies are obliged by the government legislation to buy the renewable electricity, the additional costs of which are passed onto the customers.
|Energy Source||Scale||Generation Tariff
|Solar PV||=4 kW Higher Rate||12.03||20|
|Solar PV||=4 kW Lower Rate||5.73||20|
|Solar PV||4 – 10kW Higher Rate||10.90||20|
|Solar PV||4 – 10kW Lower Rate||5.73||20|
|Solar PV||10 – 50kW Higher Rate||10.90||20|
|Solar PV||10 – 50kW Lower Rate||5.73||20|
*The current F.I.T. rate for a property with an efficiency rating of a band D or lower is 5.73p/kWh
These tariff payments are guaranteed for 20 years and they are also index linked – so they will rise in line with inflation, this also produces a tax-free return on investment of between 8 – 15% far better than any bank offers, and particularly attractive to those paying tax at the higher rate. Since the electricity generated can be used by the homeowners, there is the additional benefit of significant reductions to their electricity bill.
The Renewable Heat Incentive is a fixed payment for the renewable heat you generate yourself
While the Renewable Heat Incentive is very similar to the Feed-In Tariffs, there are some important differences due to the fact that pretty much every single property in the UK generates its own heat from a gas or oil boiler. In other words, there is no ‘National Grid for Heat’ and so importing and exporting heat is not relevant and it will be paid for by the Treasury not by energy users.
These are the three stages to the RHI:
Stage 1: Full installation of renewable heat systems in your property such as solar thermal panels, heat pumps or a biomass (wood burning) boiler.
Stage 2: A calculation is made about how much heat your renewable energy systems will produce.
Stage 3: You get paid a fixed amount based on that estimate every year for the duration of the type of renewable energy installed.
Anyone who installs a renewable energy system producing heat after July 15th 2009 is eligible to claim the Renewable Heat Incentive. Virtually every property in England, Scotland and Wales is eligible.
The government released the RHI incentive to the public in Spring 2014, however any system that was installed after July 15th 2009 will be able to claim the Renewable Heat Incentive. You could also benefit from a cash back scheme called the Renewable Heat Premium Payment scheme (RHPP), and you can see full details of both schemes, to find out more click here
Broadly speaking, the Renewable Heat Incentive is for everyone, including households, landlords, businesses, farmers