Feed-In Tariffs

Feed-in Tariffs are payments made for generating renewable energy from households and businesses in the UK. The UK Government’s drive towards renewable energy has seen cash incentives with the feed-in tariff scheme that has seen homeowners slice their annual energy costs and earn a tax-free income from exporting unused electricity back to the National Grid.

The feed-in tariffs payment or FITs work from the installation of renewable sources of power such as solar or wind energy. This ‘free’ energy generates electricity that can be used by the homeowner although usually there is a surplus that can be sold to the Grid for an extra payment. To encourage more people the UK Government pays for each unit of energy created whether it’s used or not as it stops the drain on non-renewable sources and it’s cleaner for the environment.

Solar panel feed-in tariffs are the most common in the UK for homeowners. As long as you own the building payments are made from the electricity company to the homeowner for each unit and for surplus energy. The savings from using your own generated power are also very high compared to non-renewable sources of power, and therefore there are three ways to save and earn money from using the feed-in tariff scheme.

The FIT installer will be able to explain and register your home for the FIT scheme so that as soon as it’s installed you can start saving and earning money from solar or wind power straight away. Feed-in Tariff is a scheme that is monitored and regulated by Ofgem, and the payments are guaranteed by the Government for the next 25 years. They are index-linked and generally the average rate of return is around 9%, so despite being fairly expensive to buy it’s actually a fantastic investment that pays out tax-free earnings.