Feed-in Tariffs: everything you need to know about the FiT scheme
Find out everything you need to know about the FiT scheme, which closed in 2019, and the Smart Export Guarantee that replaced it.
There are so many benefits to generating your own renewable electricity at home. The first, and most obvious, is that you’re doing your bit for climate change by powering your home in the greenest way.
Another benefit: you could get paid for the electricity you generate!
The Feed-in Tariff scheme was a government initiative that paid people for their energy. It’s now closed to new applications, but people who signed up before 2019 can still get payments.
To find out more about the FiT scheme worked, who ran it, and what replaced it, keep reading.
What is a Feed-in Tariff?
The Feed-in Tariff (FiT) scheme was a UK government initiative designed to encourage people to generate their own green electricity at home. It meant that you could get tax-free payments 4 times a year if you installed a low-carbon, renewable electricity generator in your home. For example, you could get FiT payments if you had solar panels on your roof.
It began back in 2010, giving 20 years of tax-free payments to all eligible customers. The scheme was closed to new applications in 2019, but anyone who applied and was accepted before then can still get their FiT payments now.
How does the Feed-in Tariff work?
Those who signed up to the FiT scheme before it ended get 4 payments each year. The payments are calculated based on meter readings that you send to your supplier.
Each FiT payment consists of:
- Your generation tariff, which is a payment for the amount of electricity you’ve generated
- An export tariff, which pays you for the amount of electricity you’ve sent back to the National Grid
The best bit? You can also use the electricity you generate to power your own home – which should help to save money on your electricity bills. This makes having a Feed-in Tariff a win-win.
The FiT scheme covered homes in England, Scotland and Wales, but not Northern Ireland.
Has the FiT scheme ended?
Yes. The FiT scheme closed to new applicants on 1 April 2019. If you applied before that date, and were accepted, you should still get your 20 years of FiT payments.
For more information, please visit the Ofgem website.
What replaced the Feed-in Tariff scheme?
The Smart Export Guarantee replaced the FiT scheme in January 2020. It’s a similar scheme, as it also rewards people for exporting renewable electricity from their home. But it has a few key differences.
Firstly, while the FiT scheme offered the same rate for everyone (no matter which electricity supplier you were with), the SEG tariff varies. Different electricity suppliers offer different SEG tariffs. Find out more about OVO’s SEG tariff here.
Secondly, FiT payments were based on how much electricity you generated and exported. But the SEG is based only on how much you export. To receive SEG payments, you must have a smart meter. These smart meter readings are used to calculate your payments, based on exactly how much electricity you’ve actually exported.
What types of energy generation are eligible for SEG?
You could claim SEG payments if you use any of the following to generate electricity at home:
- Solar panels (PV)
- Onshore wind turbines
- Anaerobic digestion (AD)
- Hydro power
- Micro combined heat and power (or CHP)
Who’s responsible for the FiT scheme?
The FiT scheme is overseen by the energy regulator, Ofgem. But actual payments are made by individual energy suppliers. These suppliers are referred to as FiT licensees.
How much can I earn from Feed-in Tariffs?
It all depends on what renewable technology you have installed. You’ll need to offset the amount you spent on installing your system against how much you earn from the different elements of the Feed-in Tariff. As well as the savings you make on your energy bills.
You can find out more about FiT rates (and how much you could save) on the Which? website. Remember, this only applies if you signed up to the scheme before April 2019.
Can I sell my Feed-in Tariff?
Yes – well, sort of. Some companies offer to give you an upfront lump sum of cash in exchange for your Feed-in Tariff payments. This is often advertised as ‘selling your Feed-in Tariff’.
Often, this works out in the company’s favour rather than yours. The amount you would earn over time from your FiT payments is usually higher than the lump sum. Read more about this practise over at Which?’s website.
Frequently asked questions about the FiT scheme
How do I switch to OVO with a FiT?
Switching to OVO is simple, even if you have a FiT. Get an online quote in under 2 minutes. If you only switch your electricity, your FiT will stay with your original supplier. Your energy supplier and your FiT licensee can be 2 different companies, as they’re separate contracts.
If you’re already getting the FiT from another company and want to switch to OVO you can transfer your FiT by filling out our FiT Switch Form.
How long will it take to switch my existing FiT account to OVO?
It’ll take 28 working days, starting from the date when you apply to switch your Feed-in Tariff account to us. On your FiT switch date we’ll ask you to take a generation meter reading. This will count as your closing reading with your previous supplier, and your opening reading with OVO.
Your previous supplier will continue paying you, right up to your FiT switch date, and we’ll pay you from then on.
If I switch my FiT account to OVO, will my rates change?
No, you’ll stay on exactly the same rates you’re currently getting for both generation and export. These rates are set by Ofgem.
When will I get my FiT payments?
We calculate FiT payments 4 times a year, based on readings in March, June, September and December. You must give us a generation meter reading before the end of each of these months to get paid for that quarter (more on this below). You’ll then get your FiT payment and statement 7-8 weeks after the end of that month.
We’ll pay your FiT payment directly into a bank account of your choice. Sorry, but we can’t pay by cheque, into a building society, or directly into your OVO account.
How do you calculate my FiT payments?
The first part of your FiT payments, the generation tariff, is based on the amount your renewable energy system has generated. We work this out using the meter readings you gave us, and the tariff you were given when you first signed up.
The second part of your FiT, the export tariff, is worked out in one of 2 ways, depending on your type of export:
- Deemed Export
Deemed export is when we estimate the number of generated units you’ve put back into the National Grid. This is currently estimated at 50% of your total generated units, or 75% for hydro systems.
- Metered Export
Metered export is when you use your export meter or smart meter to measure the amount of power you’re exporting to the National Grid. It means you get paid exactly the right amount.
Will my FiT payments go up with inflation?
Yes! Your Feed-in Tariff payments are adjusted every year to allow for inflation, in line with the Retail Price Index (RPI). For a full list of tariff tables, visit Ofgem’s website.
Are Feed-in Tariff payments taxable?
Feed-in Tariff payments are tax-free, so long as the electricity you generate is used for domestic purposes.
If you’re VAT registered (so you have a business at your FIT address), we’ll pay VAT on your export payments. However, you must let us know this when you sign up, otherwise you won’t get them.
When do I need to give readings from my generation meter?
In March, June, September and December. We’ll send you an email reminder at the start of these months, with a link to an online form.
What happens if I forget to take a generation meter reading?
If you forget to send us a reading, you won’t get your quarterly Feed-in Tariff payment in that period. But as long as you give a reading next time, we’ll make sure you’re paid the full amount for what you’ve generated. So it’ll just be backdated the next time we pay.
What happens to my FiT account if I move house? Does my FiT transfer to the new owner?
If you sell your house, solar panels are usually sold with it (the new owner will need to fill in the Change of Ownership Form). This means the new owners of your home can inherit the FiT and get all future payments from the completion date of the sale. Don’t forget to give final generation meter readings when you leave.
If you want to take your solar panels and install them at your new home, they’ll no longer be eligible for FiT payments. You won’t be able to register from your new address, as the FiT scheme has now ended.
What if I have a battery installed?
We need to make sure the electricity being recorded on your export meter is definitely coming from your system, and not from another source. If you have a battery installed, you’ll need to send us a detailed line diagram clearly showing the direction of energy going from your solar panels to the rest of the installation.
Can I make my system bigger, and will it affect my payments?
You can increase the size of your system if you want, but only to generate extra energy for your home. Any extensions to your system won’t be eligible for the FiT scheme. You can find more info in Section 5.57 of this Ofgem document.
If you do make any changes, let us know by email: [email protected]
Do you need to verify my meter?
As part of Ofgem regulation, FiT licensees or energy suppliers are required to check a generation meter at least once every 2 years.
Morrison Data Services (MDS) have been conducting these visits on an ad-hoc basis. They’ll make 3 attempts over a 2 week period. If they fail to gain access to the property and meter, then the FiT team will contact you directly, to arrange a specific appointment for MDS to re-attend.
As part of the FiT scheme, it’s important to make sure MDS can get access to verify your meter.
What is a metered export tariff?
A metered export tariff pays you for every kilowatt hour (kWh) of electricity you export to the National Grid.
If you have a metered export tariff, you'll need to give readings from both your generation and export meters when we ask for them.
Who should I contact if I’m having problems with my generating equipment?
You’ll need to speak to your installers. They’ll be able to help with all technical and faulty equipment questions. It’s really important that you let us know if they change your generation meter or any of your equipment, as this could affect your payments.
How do I leave OVO with a FiT?
You can switch your electricity away from OVO at any time, but still keep your FiT with us. They’re 2 separate contracts.
Of course, we’d be sad to see you go. If you stay with OVO, you’ll get 100% renewable electricity as standard1, a tree planted in your name every year2, and a £50 gift card for referring your friends and family, too. If you’re sure you’d like to switch, just contact your potential new supplier and start switching in the usual way.
If you want to switch your FiT too, you’ll need to speak with your new supplier’s FiT team. They’ll contact us through Ofgem to let us know you’re leaving, and will ask you for a reading on the day of your switch. They’ll use this to open your new account with them and close your account with us. We’ll then make sure you get your final statement and payment in the upcoming payment month.
Who should I contact if I have more questions about the Feed-in Tariff?
Call us on 0330 303 5063. We’re here from 9am until 5pm, Monday to Friday. Outside these times, email [email protected] and we’ll get back to you within 5 working days.
Get greener home energy with OVO
Want to power your home with 100% renewable electricity? With OVO, you’ll not only get that as standard, but to cap it off, we’ll also plant a tree for every year you’re with us.
Eco-warriors can also choose to add on our green upgrade, OVO Beyond, to any of our tariffs.
This gives you 100% carbon-neutral energy3, and not one, but 5 trees planted in your name every year. The first 3 months are on us, then it’s just £6 a month extra.
What are you waiting for? Get a quote and find out how much you could save, in less than 2 minutes.
Sources and references:
1 100% of the renewable electricity we sell is backed by renewable certificates (Renewable Energy Guarantee of Origin certificates (REGOs)). See here for details on Renewable Energy Guarantee of Origin certificates and how these work. What's more, 20% of the electricity we sell is purchased direct from UK renewable generators.
2 Each year, OVO plants 1 tree for every member in partnership with the Woodland Trust. Trees absorb carbon dioxide from the atmosphere, so tree-planting helps to slow down climate change.
3 Enjoy even greener energy with OVO Beyond in comparison with our standard OVO plans. In addition to 100% renewable electricity as available with our standard plans, OVO Beyond reduces your yearly carbon emissions from the energy used in your home that is supplied by OVO to net zero by providing 100% carbon-neutral gas (15% green gas and 85% offset) and offsetting all associated lifecycle carbon emissions involved in the production and consumption of your electricity & gas, you will also get 5 trees per year in UK schools and communities and other green benefits. The renewable electricity we sell is backed by renewable certificates (Renewable Energy Guarantee of Origin certificates (REGOs)). See here for details on Renewable Energy Guarantee of Origin certificates and how these work. The green gas we sell is backed via renewable certificates (Renewable Gas Guarantees of Origin (RGGOs)). See here for details on Renewable Gas Guarantees of Origin and how these work. We offset the remaining emissions by supporting UN REDD+ carbon reduction projects that are certified to the Verified Carbon Standard or the Gold Standard. See here for more information on how we restore nature and protect rainforests with our offsetting programmes