Feed-in tariffs in the United Kingdom

Feed-in tariffs in the United Kingdom were announced in October 2008 and took effect from April 2010. They were entered into law by the Energy Act of 2008.

The Feed-In Tariff applies to small-scale generation of electricity using eligible renewable technologies. To encourage development of these technologies, feed-in tariffs pay the generator a certain amount even for energy which the generator themselves consumes. Electricity fed into the grid receives an additional export tariff, currently (June 2013) 4.5p per KWh. Costs for the programme are borne by all British electricity consumers proportionally: all consumers will bear a slight increase in their annual bill, thus allowing electricity utilities to pay the FIT for renewable electricity generated at the rates set by the government. Payments through the mechanism are intended to replace the ROCs available through the Renewables Obligation for small-scale renewable energy generators and is based on a few key elements:

The government estimated that feed-in tariffs to support small-scale low-carbon generation would cost £8.6 billion up to 2030 and produce monetised carbon savings worth £0.42 billion.

Feed-in-Tariff payments are Tax-free in the UK.

A new study from the University of London has assessed the first year of the UK FIT scheme through interviews with both users of the scheme and government figures. The key findings are that users have had a wide variety of experiences, depending on the technology they are working with, and that the government has very limited ambitions on small-scale renewable energy generation.

Domestic solar has performed well in the first year, with 28,028 of the 28,614 total solar installations (totalling nearly 78MW). Wind power has the next highest installation level with 1,348 (20.4MW). Small hydro had 206 (12.1MW), although many were not new installations, but had been transferred from the Renewable Obligation scheme. Micro-CHP had 98 installations (0.09MW), and Anaerobic Digestion (AD) had just 2 (0.66MW). AD is under scrutiny at present (April 2011) to determine why development has been so poor.

The study suggests that technologies have a variety of factors affecting their performance in terms of installation levels. The factors include cost, size, availability, standardisation of the technology, planning issues, ease of installation, perceived sensory impact (sight, sound and smell) and administrative complexity. Domestic PV scores very positively on all these factors, while small hydro and AD do far less well.

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