UK feed-in tariff is announced: payback begins April 1

The UK feed-in tariff rates have now been finalized, offering its residents a financial incentive for producing renewable energy. The government has confirmed the proposed rate, which will begin to take effect from April 1, 2010.

Energy and Climate Change Secretary Ed Miliband announced the FiT levels and also published a blueprint for a similar scheme to be introduced in April 2011, which will offer incentives for low carbon heating technologies.

"The guarantee of getting an income on top of saving on energy bills will be an incentive to householders and communities wanting to make the move to low carbon living.

"The feed-in tariff will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past.

"It will also change the outlook for a range of industries, in particular those in the business of producing and installing small scale low carbon technology," said Miliband.

From 1 April householders and communities who install solar photovoltaic panels of up to 5MW will be paid for the renewable electricity they generate, even if they use it themselves. The level of payment depends on the technology and is linked to inflation. These levels can be seen in the table below.

*NB This tariff is available only for 30,000 microCHP installations. A review will take place when 12,000 units have been installed.

Renewable electricity generators will get a further payment for any electricity they feed back into the grid. The announced scheme will also apply to installations commissioned since July 2008 when the policy was first announced.

Under the terms of the FiT system, Ofgem will administer the FiT scheme and suppliers will be responsible to paying the reward to their customers. These incentives will we available to UK residents from April 2010.

All installers in the UK will need to be registered under the Microgeneration Certification Scheme, which ensures that policies and procedures meet the requirements of the scheme and that the work that has been undertaken is consistent with the system design. This scheme is open to companies involved in the supply, design, installation, set to work and commissioning of microgeneration systems and technologies.

Details of the funding for the scheme will be published in the Budget 2010