Last updated: July 2013
What are feed-in tarrifs?
A Feed-in Tariff (FIT) for domestic renewable energy generation was introduced in 2008.
Most domestic technologies qualify for the scheme, including:
- solar electricity (PV) – roof mounted or stand alone
- wind turbines – building mounted or free standing
- micro combined heat and power (CHP).
Large suppliers are required by law to pay customers for any electricity they produce and ‘feed in’ to the grid. The smaller companies are not required to but as you can see from the table on page 18, all of the suppliers covered in the electricity report have opted to, with the exception of Ovo Energy which plans to.
FITs offer financial rewards through:
- generation tariffs which you receive for every unit of renewable energy you produce, regardless of whether you use it or not
- export tariffs which you receive in addition for any surplus energy you produce but do not use and export to the grid
- energy bill savings, as you won’t have to buy as much energy from your energy supplier.
More information about FITs can be found on the Energy Saving Trust website and full details of the current tariffs offered can be found on the Ofgem website.
Friends of the Earth welcomed wholeheartedly the introduction of the UK Feed-in Tariff as “as real chance for households, businesses, communities, local authorities, farmers and others to take some degree of control over their energy supply away from the energy companies, to cut their carbon emissions, protect themselves against future fossil fuel price rises and gain a stake in creating a low-carbon economy”.
So it was a sad twist of fate that the NGO ended up taking the government to court over its decision to drastically cut – by over half – the FIT rate for photovoltaic generation. Friends of the Earth along with the solar industry, took the battle to the High Court, the Court of Appeal and then the Supreme Court over the issue and succeeded in delaying the measures. The High Court ruled the cuts as legally flawed.
Companies sue the government
Seventeen solar companies are now planning to sue the government for £140m in damages. They say the way in which the changes to the Feed-in Tariff were handled was disastrous for their businesses, leading to a sudden and dramatic fall in the number of people installing solar panels, and companies had to lay off thousands of workers.
Given the huge amount of subsidies provided to the fossil fuel industry, outlined by Platform, it is a disgrace that the government has failed to support those attempting to implement practical solutions to cutting carbon emissions and has not kept its word with regard to the FIT. The FIT is in fact a fairly small step in terms of what is actually required to slow catastrophic climate change – the failure to even stick to this renders any government rhetoric on climate change truly hollow.