What are feed-in tariffs with Renewable Energy?

Quite simply, feed-in tariffs are payments to everyday, normal energy users for the renewable electricity they generate and use. Commonly referred to as the ‘Clean Energy Cashback’, it is an incentive to get the public to use green electricity.

When was it introduced?

 

Announced by the government in 2008, the feed-in tariff saw the light of day in early 2010. It has been introduced as a means to increase the renewable energy available in the UK. The reason for this is due to the campaign from Friends of the Earth and the REA amongst others to get renewable energy more common placed throughout the UK market and into UK law.

What are the benefits of feed-in tariffs?

 

Apart from offering clean and renewable energy, the financial rewards offered from feed-in tariffs also come in very useful. A user is offered payment for all the electricity they provide to the grid as well as getting their own self-generated electricity free. As you provide your own electricity, this means a dramatic decrease in your electricity bills and payments.

Are feed-in tariffs available to everyone?

 

Yes. As long as you have the standard equipment necessary to be eligible to qualify, feed-in tariffs are available to everyone. This doesn’t just mean home owners; businesses, schools and other public buildings can all qualify for feed-in tariffs.

What is required to qualify?

 

A renewable energy generation system with a capacity of 5MW and an electricity output less than 5MW. Simply speaking, anyone can qualify if they have the correct equipment installed and output the required amount of electricity.

Is the cost of heating included?

 

No, heating falls under a separate incentive – Renewable Heating Incentive, and therefore cannot be included in a feed-in tariff.

 

There are three important things to take note when considering feed-in tariffs;

  • The Generation Tariff

This is the fixed rate of income for every kilowatt hour of electricity you generate. This includes the amount of energy your property uses as well as export back into the grid.

energy

Photo source: http://www.flickr.com/photos/magharebia/5263617050/

 

  • The Export Tariff

This is an additional payment you receive for every kilowatt hour of electricity you sell back to the grid itself.

  • Buying electricity

Simply put, the sun doesn’t always shine in the UK. So, if necessary you can buy back electricity from your utility provider at the standard rate, however, the electricity you need will be much less of that of the average household.

 

The Future of feed-in tariffs

 

As people remain unsure of what the future economic climate will provide as well as job uncertainty, feed-in tariffs will become more and more common place.

The cost of installing the required generation system continues to fall as the technology advances meaning more and more property owners are viewing feed-in tariffs as a safe, renewable and cost effective system.

A higher emphasis on global pollution, the ever increasing cost of power also means that feed-in tariffs are becoming a more attractive prospect to property owners.

Andrea Collins has been looking at gas and electricity prices for her parents, looking for the beset deal. She did find a great deal eventually.

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