Feed-in Tariff rates: understanding your payments

The Feed-in Tariff (FIT) scheme, once a key part of the UK's renewable energy landscape, closed to new applications on 31 March 2019. If you are an existing generator, your FIT contract remains valid, ensuring continued payments for the electricity your system generates and exports. Understanding how these payments are calculated, adjusted, and administered is crucial for maximising your earnings from your renewable energy installation.

Managing your energy should be straightforward, whether you're generating your own or simply consuming. Fuse Energy aims to make understanding your energy simple, with clear pricing and smart tools to help you manage your usage. Click here to switch to Fuse Energy today.

What was the Feed-in Tariff (FIT) scheme?

The Feed-in Tariff (FIT) scheme was a UK government initiative launched in April 2010 to encourage the adoption of small-scale renewable and low-carbon electricity generation technologies, such as solar panels and wind turbines, in homes across Great Britain. It provided financial incentives through payments for generated electricity and additional payments for surplus electricity exported to the National Grid.

A brief history of the Feed-in Tariff

The FIT scheme entered into law through the Energy Act 2008 and began accepting applications for systems installed from July 2009. It offered tax-free payments, typically over 20 or 25 years, to eligible generators. The scheme aimed to make renewable energy generation more financially attractive, contributing to significant growth in domestic solar panel installations.

Why the Feed-in Tariff closed to new applications

The FIT scheme closed to new applicants on 31 March 2019. This decision followed government consultations and was largely due to the significant fall in the cost of installing renewable technologies, particularly solar panels, which reduced the need for the initial level of subsidy. The scheme had successfully achieved its goal of encouraging widespread adoption, and a new mechanism was deemed necessary to reflect the evolving energy market.

Who is still eligible for Feed-in Tariff payments?

While the scheme is closed to new applications, existing FIT contracts continue to be honoured by designated FIT Licensees (energy suppliers) for their full term. This means if you applied and were accepted before 1 April 2019, you will continue to receive payments for up to 20 years from your installation's start date, or 25 years for solar photovoltaic (PV) projects installed before 1 August 2012.

How Feed-in Tariff rates work for existing generators

For those with active FIT contracts, understanding the components and adjustments of your payments is key. Your payments are typically made quarterly and consist of two main parts: a generation tariff and an export tariff.

Understanding your Feed-in Tariff generation rate

The generation tariff is a payment you receive for every unit (kilowatt-hour, or kWh) of electricity your renewable system generates, regardless of whether you use it yourself or export it to the grid. This rate was fixed when you joined the scheme and depends on factors such as the technology installed, its capacity, and the date of accreditation.

Understanding your Feed-in Tariff export rate

The export tariff is an additional payment for the surplus electricity your system sends back to the National Grid. For many FIT customers, this is a "deemed" export, meaning it is an estimate of the electricity you export, rather than an exact metered amount. Some installations, particularly newer ones or those with smart meters, may have "metered" export, where payments are based on actual exported units.

How Feed-in Tariff rates are adjusted (RPI indexation)

Feed-in Tariff rates are adjusted annually to account for inflation. Up to and including FIT Year 16 (ending 31 March 2026), this adjustment was typically linked to the Retail Price Index (RPI). However, from 1 April 2026 (FIT Year 17 onwards), tariff rates will be adjusted annually in line with the Consumer Price Index (CPI).

Finding your Feed-in Tariff administrator

Ofgem is the energy regulator responsible for overseeing the FIT scheme, but the day-to-day administration and payments are handled by designated FIT Licensees, which are typically energy suppliers. If you have a query about your FIT payments, you should contact your specific FIT Licensee. Ofgem maintains a list of these licensees and their contact details. You can also switch your FIT administrator if you wish.

The Smart Export Guarantee (SEG): the modern alternative

With the closure of the FIT scheme, a new mechanism was introduced to support small-scale renewable energy generators.

What is the Smart Export Guarantee?

The Smart Export Guarantee (SEG) is the successor scheme to FIT for new renewable energy installations in the UK. Introduced on 1 January 2020, the SEG requires larger electricity suppliers to offer a tariff for electricity exported to the grid from eligible low-carbon technologies. Unlike FIT, SEG tariffs are market-driven, meaning different suppliers offer different rates, and payments are based on actual metered exports. You can learn more about this in our guide, what is the SEG.

Key differences between FIT and SEG

The FIT scheme offered both a generation tariff (for all electricity generated) and an export tariff (for exported electricity), with rates set by the government and adjusted for inflation. SEG, however, only pays for the electricity you export to the grid, and the rates are determined by individual suppliers, not a fixed government rate. Another key distinction is that SEG payments require a smart meter capable of providing half-hourly readings, ensuring payments are based on precise export data. While FIT contracts are long-term (20-25 years), SEG tariffs typically have shorter contract terms, often 12 months. If you don't have a smart meter, you can find out more about a smart meter installation process.

How Fuse Energy supports the Smart Export Guarantee

Fuse Energy does not administer the Feed-in Tariff scheme, as it closed to new applications in 2019. However, Fuse is committed to building a future with power to play with, and actively supports the modern, abundant energy system through competitive SEG rates. Fuse's approach empowers customers to understand and optimise their energy use and export. Fuse offers an export tariff of 13p per kWh for every kWh of electricity you export to the grid. If you have an existing export Meter Point Administration Number (MPAN), you can onboard it in the Fuse app. If you do not have an export MPAN, Fuse can help generate one from your Distribution Network Operator (DNO) connection approval (G98/G99 paperwork) and an MCS certificate.

Maximising your renewable energy export earnings

Whether you are an existing FIT customer or considering a new installation, there are ways to make the most of your renewable energy system.

Tips for existing Feed-in Tariff customers

If you are on an existing FIT contract, your payments are guaranteed for the duration of your term. To maximise your earnings:

• Submit meter readings regularly: Ensure you provide accurate generation and export meter readings to your FIT Licensee within their specified windows to receive timely and correct payments.
• Understand your contract: Familiarise yourself with your specific generation and export rates, and how they are adjusted annually.
• Consider switching export to SEG: If your FIT export rate is "deemed" (an estimate) and you export more than the deemed percentage, you might benefit from switching your export payments to a SEG tariff. You can keep your FIT generation payments while moving just your export to SEG. This requires a smart meter.
• Review system changes: If you are considering adding battery storage or upgrading panels, consult your FIT Licensee or Ofgem's guidelines, as rules have changed to allow modifications without losing your FIT.

Considering new installations with the Smart Export Guarantee

For those planning new renewable energy installations, the SEG is the current mechanism for receiving payments for exported electricity. Research different suppliers' SEG tariffs, as rates can vary significantly. Some suppliers offer better rates if you also get your import electricity from them. Ensure your installation is MCS certified and you have a smart meter to be eligible for SEG payments.

The role of smart technology in energy export

Smart technology, including smart meters and home energy management systems, plays a crucial role in optimising energy export. Smart meters enable accurate, half-hourly measurement of exported electricity, which is essential for SEG payments. Fuse's app provides control and transparency for overall energy management, empowering customers to understand and optimise their energy use and export. This aligns with the idea of making the most of available resources and not settling for less, putting the power to play with back into your hands.

Frequently asked questions about Feed-in Tariff rates

Can I switch my Feed-in Tariff administrator?

Yes, you can switch your FIT administrator (the energy supplier that makes your FIT payments). Many energy companies, including some of the larger ones, act as FIT Licensees and allow you to transfer your FIT administration to them. This process typically involves completing a switch form and providing necessary documentation.

What happens when my Feed-in Tariff contract ends?

When your FIT contract ends (typically after 20 or 25 years), you will no longer receive generation or export payments under the scheme. However, your renewable energy system will continue to generate electricity. You can then switch to a SEG tariff to receive payments for your exported electricity, provided you have a smart meter. Your panels will continue to provide free electricity for your home, reducing your energy bills.

Where can I find official Feed-in Tariff rate tables?

Ofgem, the energy regulator, is responsible for publishing the official Feed-in Tariff rate tables. These tables are updated annually, typically on 1 April, and detail the generation and export tariff rates for different technologies and installation dates.

Understanding your export payments, whether through FIT or SEG, helps you make the most of your renewable energy system. Fuse Energy offers competitive SEG rates and smart tools to help you manage your energy. Switch to Fuse Energy for clear pricing, real-time usage data, and 24/7 human customer support. Find out more about our mission to make energy abundant by clicking here.