Feed In Tariff (FIT) – or the “Clean Energy Cashback”

This scheme will come into effect on 1st April 2010. It is a financial incentive for new* installations of renewable energy technology that generate electricity.

Under the scheme, energy suppliers will make regular payments to householders and communities who generate their own electricity. The funding for the Cashback will come from a levy on all electricity sold in the UK, and is estimated to cost about £8.50 per household per year

According to the Energy Saving Trust, a domestic Solar PV installation could give you an income of £700 a year in addition to the savings you make on your electricity bill. The income is free of income tax.

The old grant scheme called Low Carbon Buildings Programme now no longer provides funding for installing renewable electricity systems.

The idea of the new scheme is to encourage small-scale installations, such as Solar PV on houses, schools and business premises. These installations will reduce carbon emissions and count towards the UK’s target of 15% renewable energy by 2020.

Other renewable electricity technologies like wind turbines and small-scale hydro are covered by the scheme, but this note focuses on ‘Grid-connected’ Solar PV since wind and hydro are unlikely to be suitable for use in Woking, and off-grid installations are less common. If you want to find out about these other technologies, try the Energy Saving Trust webpages.

A grid-connected Solar PV installation connects to the building wiring so that your electrical appliances automatically use your own electricity as first choice. If you are generating more than you are using, the excess is sent to the grid – called ‘exporting’. If you are using more than you are generating, you buy electricity from the grid to top up your own – called ‘importing’. All this happens automatically once your system has been commissioned.

You get paid for all the electricity you generate, whether you use it or you export it to the grid. You also get a smaller payment for the electricity you export. These payments are in addition to the bill savings made by using your own electricity instead of from the grid.

A standard ‘grid-connected’ Solar PV installation does not include any batteries, so it does not give you a back up in case the mains fails. Also, if the mains does fail, your Solar PV system will shut down and will not supply your house.

* If you already have Solar PV and it was installed after 15 July 2009, you are still eligible for the full rate Feed in Tariff. If your installation pre-dates 15 July 2009, you are eligible for a lower tariff called the ROC transfer tariff.

 How the Feed in Tariff works


As an example, a domestic solar electricity system with a rated size of 2 kW(peak) could earn around:

  • £700 per year from the Generation Tariff
  • £25 per year from the Export Tariff
  • £110 per year reduction in current electricity bills.

i.e. a total saving of around £830 per year.

In this example 50% of the electricity generated is exported. This figure will vary through the year and depends on how usage pattern matches your solar generation.

Note that 2 kWp is probably slightly larger than could typically be accommodated on a modern 2-storey house.

How much does it cost, and what is the payback?

A standard roof mounted Solar PV system of 2 kWp will typically cost around £11-12,000. If unshaded and facing south or close to south, it can generate up to 2000 kWh per year. A typical household in the South-east consumes around 4000-5000 kWh per year.

Payback of about 8% per year is likely. So even if electricity prices don’t go up, you would recoup your initial outlay in about 12 years. If they do go up, the payback period will be shorter.

Tariffs for Solar PV

Generation tariff

Solar PV up to 4kWp fitted to an existing building     41.3p per kWh (unit)

Solar PV up to 4kWp fitted to a new building           36.1p per kWh

Export Tariff                                                           3p per Kwh

(Rates for other technologies like wind turbines are on the EST website)


  • The rates are guaranteed for 25 years for installations completed between 15 July 2009 and 31 March 2012. After that date, rates offered will be lower.
  • These tariff rates are linked to the Retail Price Index, so they will increase in line with inflation
  • To claim for exported units you will need to have an ‘Export Meter’ installed. This is separate to the ‘Generation Meter’ that measures the total units your solar PV has produced. From the example above, you can see that the income from exported units is much smaller, and you may decide that the additional cost of an Export Meter is not justified. As an interim measure, DECC has announced that at the very small scale, the amount of exports for the payment of export tariffs can be deemed (estimated), subject to the following
    • These arrangements will only apply until the finalising of specifications for smart meters;
    • These arrangements do not apply if export meters exist already, or are provided at the generator’s expense

Installing Solar PV

To qualify for the feed in tariff:

  • You must install new (not secondhand) equipment.
  • You must use a trained and qualified supplier to provide the system and to install it – one who is accredited under the Microgeneration Certification Scheme  MCS)

(Installing grid-connected Solar PV is definitely not a DIY job. Besides the safety aspects of working on a roof, only accredited persons are allowed to connect generating systems to the grid.)

The most common installation comprises a number of panels laid on top of the existing roof tiles, and bolted through to the roof timbers. Alternatives are to mount them on a flat roof on stands which angle them to face the sun. Least common, but possible, is to install them on stands in the garden. Finally, it is possible to get roof tiles that incorporate Solar PV modules.

Panels should be sited to face as close as possible to due south and be as free as possible from shading, e.g. trees or adjoining buildings. Stand mountings should be fixed or ballasted to prevent damage from winds.

Panels come in many different sizes, and can be square or oblong in shape. Your supplier should be able to design an installation to best match your available roof space, by choosing suitable size / shaped panels. Generally, the bigger the panel, the more power it will generate. There are slight variations in efficiency across manufacturers and models.

As a general rule of thumb (at the time of writing), a panel area of 10sq metres will have a generating capacity of about 1.5kWp.

Planning permission is usually not required if the panels are fitted to a pitched roof, but may be required if they are installed on a flat roof or on ground mounted stands. It is your responsibility to check. On listed buildings, other considerations apply.

As well as the panels, your installation will have an Inverter, a Generation Meter, isolation switches, and possibly an Export Meter. This ancillary equipment can be mounted in the loft or if you want to read the meters more conveniently, you could have them installed elsewhere in the house. The grid connection is taken to your electricity consumer unit, and needs a spare ‘way’ to take a standard miniature circuit breaker.

See typical Solar PV panels and ancillary equipment here – n.b. there are other suppliers.

Your installer should contact the company who provides the mains grid connection into your house – normally EDF in Woking – to tell them that your installation is complete and to register it under the G83 regulations. You should have a warning label fitted close to your main electricity meter to advise engineers that there is an on-site generator.

The final step is to check that your electricity supplier is participating in the scheme and will be able to pay for your electricity. If not you will have to switch supplier.

Energy Conservation 

Generating your own electricity will offset some of your household carbon emissions. But it is still important to manage your overall energy consumption – for example by switching off appliances and lights when not needed, and making efficient use of hungry appliances like dishwashers, washing machines and tumble driers. That way you will reduce the demands placed on the grid and the carbon emissions produced by centralised power stations running on coal and gas.

For example – it’s better to consume 4000 units a year and offset half of them, than to consume a total of 5000 units a year and use a bigger Solar PV system to offset 2500 units.

Further information

Will I be eligible to receive the tariff if I move into a home that already has an electricity generating technology?

FIT eligibility remains with the installation, even if the ownership of the home or generating technology changes. Therefore the technology must have been eligible before you move in, even if it is not registered yet.

What happens if I move home?

Ownership of the technology is linked to the site and, therefore, in the case where a building or homeownership changes, the ownership of the technology would also transfer to the new owner.

I rent my property. If my landlord installs an electricity generating technology, who would receive the FITs?

It will be up to landlords and tenants of domestic or commercial property to come to an arrangement about the receipt of payments and on-site electricity use benefits.

Radio programme about Feed In Tariff from the Ecologist Magazine website