Two types of incentives were implemented to promote green energy in the same legislation – the Energy Act 2008, Feed-in tariff and Renewable Heat Incentive. Feed-in tariff is for systems producing electricity from green energy, Renewable Heat Incentive is for systems producing heat from green energy.
The feed-in tariff scheme rewards the green energy producers based on the amount of energy they produce. To qualify for Feed-in tariff scheme the home must possess a Energy Performance certificate rating of D or higher.
As of 2010, feed-in tariff policies had been enacted in over 50 countries, including Algeria, Australia, Austria, Belgium, Brazil, Canada, China, Cyprus, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Iran, Republic of Ireland, Israel, Italy, Kenya, the Republic of Korea, Lithuania, Luxembourg, the Netherlands, Portugal, South Africa, Spain(suspended from 2012), Switzerland, Tanzania, Thailand, and Turkey.
How do we benefit by FIT ?
Three different ways of benefiting through FIT scheme.
1. The Generation Tariff
Every unit of electricity produced through solar power will earn a fixed income whether it is put to use or not. The price of a unit depends on the country of residence.
2.The export tariff
Every surplus unit of electricity, which are sent to the grid earn an additional income.
3.The units you buy
During the times when there is a limited sun-shine on the roof, or on cloudy days, we would have the need to buy electricity from the grid at normal rates, but the rates are much lesser than those without green-energy investments.
The tariff would help out with the initial installation cost, and would provide up to 8% p.a. return. Older systems, set up before July 2009 are eligible for 9 p/kWh.
What is the duration of eligibility ?
Tariffs are paid to the eligible customers for the period of 20 years, solar system setup before 1st August 2012 are eligible for 25 years.
What are the restrictions ?
FIT scheme is for all, household, business and organisation. Any type of green energy setup will be eligible for scheme, whether it is solar, wind, biomass. These green setup need not necessarily be a new setup to be eligible, even older setups (installed before 2010) are eligible for the same. Any setup which produces less than 5 MW are eligible for the scheme. In reality no home would exceed that limit.
The installation need to follow the planning permissions, connection terms and other legal obligations. For country specific restriction visit the wikipedia page: http://en.wikipedia.org/wiki/Feed-in_tariff#Grid_parity