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Feed-In Tariff (FIT)

The Feed-in Tariff is easy in concept but less so in execution.

We've put together our guide to the Feed-in Tariff to help you understand its impact and potential benefit to your business.

We have divided our guide into four key sections, each focusing on a particular element and perspective of the scheme:

  • What is it?
  • How can your business benefit?
  • How can we help?
  • How much does it cost non-participants?

Put basically the Feed-In Tariff or its commonly used abbreviation FIT is a charge on all business electricity customers to reward, compensate and benefit those customers who have access to their own generation and who consequently take pressure and reliance off the main generating grid.

It is related to, but not the same as the Renewable Heat Incentive (RHI) The monies collected via electricity bills are recycled by energy suppliers and used to reward businesses with what is known as ‘embedded generation'.

This may sound grand or complex however it can be as simple as having a solar panel fitted to the roof of your premises.

The government scheme that underpins FIT was launched in April 2010 in order to “encourage the uptake of small-scale renewable electricity generation”.

The FIT conception is part of a number of protocols, initiatives, and policies that successive governments have brought in to fulfill the obligations they face from over-arching EU environmental legislation.

The magnificence of the FIT scheme is that following early investment, not only will you be saving money by generating your own electricity, you'll also get paid for the electricity you produce (a generation tariff) and if you generate more than you need you could be paid for ‘spilling' that energy back into the ‘grid' (an export tariff).

So:

  • You'll be rewarded for each kWh of electricity you generate, even if you use it yourself, this is known as the Generation tariff, which although dependent on the energy resource used, is a set rate for each unit generated, index-linked and guaranteed for the period of the tariff (up to 20 years);
  • You'll be paid for any surplus kWh of electricity you export to the grid, this is known as the Export tariff, and is a uniform p/kWh payment regardless of energy source used; and
  • You'll save money on your electricity bill because you'll be using your own electricity!

Organizations, such as the energy suppliers, can apply to be Feed-In Tariff Licensees, others are mandated to do so, as a result eligible customers can always be sure that they have a ready market and a compensatory framework through which the potential rewards can be delivered.

First of all your premises or premises will require to have an eligible renewable energy generation source installed.

Eligible sources include:

  • Solar panels (roof-mounted or stand-alone)
  • Wind turbines (building mounted or free-standing)
  • Hydroelectricity
  • Anaerobic digesters
  • Micro combined heat and power (CHP)

Further, these can be segmented into Photovoltaic sources (PV) and non-photovoltaic sources (non-PV).

  • Your generation address will need to be registered with and recognized by the Post Office.
  • Your premise' generation capacity will need to be less than 5MW.
  • Your installation and installer must be certified under the Microgeneration Certification Scheme (MCS) or it if is hydro or anaerobic digestion this will be subject to the ROO-FIT process.
  • You'll need the installer to have registered the install on the central MCS database and to have received a certificate of MCS compliance from them.

Once the equipment is commissioned for use on your premise, you will need to approach a FIT Licensee so that you can be officially registered on the Ofgem Central

As part of this process, you should contact Lloyd energy to help you select the best FIT Licensee for your needs.

Once recognized you will need to give your chosen FIT Licensee with the MCS compliance certificate, the application form (including MCS number), the meter reading(s) taken on the day of application compliance, proof of rights and ownership for the generation equipment on-site i.e. copy of Final Paid Invoice, any required signed declarations and where applicable the EPC for your premise.

Despite having done this there is still more to do to receive your incentives.

Your eligibility date will require to have been approved and for Solar installations, your premise' Energy Performance Certificate (EPC) rating will need to be evaluated.

Your eligibility date will be the date your FIT Licensee receives a valid application for FIT identification. This will more than likely be after the date on which your renewable electricity system is installed. The only departure from this process is for Solar installations, where these are additions to an existing system, the eligibility date will be the date of commissioning and not the date of any subsequent application.

Crucially you will only be paid for the energy you generate from the meter reading taken on the eligibility date.

The EPC plays an important role here too for Solar installations, the EPC, which must be dated prior to the commissioning date must be submitted with your application. If you fail to provide the relevant EPC or the EPC rating is below D you will receive the reduced tariff rate for your FIT award.

As a result it is a crucial part of the process to professionally complete the administration process that supports the FIT scheme.

Once all this is done, your premise will be ready to receive the compensatory tariffs from your energy supplier

Feed-in Tariff – How can we help?

Here at Lloyd energy, we can use our relationships with the full market of FIT Licensees to secure your business the optimum FIT deal. Whilst incentives are set centrally, the efficiency of the FIT Licensees in delivering timely and accurate payments and dealing with any administration issues can differ greatly.

Also, errors in the submission and accreditation process can lead to costly delays in achieving your eligibility date, which can prevent you being paid for the electricity your site generates.

Lloyd energy will help your business ensure that the additional administration that underpins a FIT agreement is completed in accordance with rules and in a timely manner.

Lloyd energy will also secure you a perfect deal for the energy consumption your business does need to draw from the grid as well as being able to deliver low standing charge products on the occasion that no chargeable demand is being made on the metering system.

Feed-in Tariff – How much does it charge non-participants?

As a result business electricity customers pay for the FIT scheme through their energy bills.

This cost equates to a charge of between 0.30p/kWh and 0.35p/kWh.

All energy suppliers are gratified to charge this regardless of whether they are a FIT Licensee or not.

To discover out more about the Feed-In Tariff, how your business could benefit or for helping find the right FIT Licensee and energy supply contract for your needs, simply call our energy experts on 08000488472.

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