Feed-in Tariff
What is the Feed-in Tariff (FiT)?
If your business installed solar panels, a small wind turbine, or a micro hydro system before 1 April 2019, there’s a reasonable chance you’re still being paid for the electricity you generate. That’s the Feed-in Tariff, the FiT scheme. It closed to new applicants in 2019, but installations already in it keep their payments for 20 to 25 years from the date they were accredited. For everything installed after that date, the Smart Export Guarantee took over.
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The FiT was the UK’s first major support scheme for small-scale renewable generation. It ran from 1 April 2010 to 31 March 2019. Understanding what it did, who still benefits from it, and what replaced it helps make sense of any older solar PV or wind installation you might inherit at a site.
What the FiT actually was
The Feed-in Tariff was a UK government scheme administered by Ofgem that paid owners of small-scale renewable electricity generators for the power they produced. It was open to solar PV, wind, hydro, anaerobic digestion, and micro-CHP installations up to 5 MW capacity.
The scheme had two strands. The generation tariff paid you for every kWh your system produced, regardless of whether you used the electricity on site or exported it. The export tariff paid you separately for the kWh you actually exported to the grid.
For most small installations the export was assumed at 50% of generation rather than actually metered, so the system paid generation in full and export on the assumed half.
The FiT was funded through a levy on UK electricity bills. It was a deliberate policy intervention designed to kick-start a market that wouldn’t yet have existed without subsidy.
How payments worked
Payments came from your electricity supplier, not from Ofgem directly. You signed up to FiT with a ‘FiT Licensee’. Usually your existing supplier. Who took meter readings and paid you the tariff based on the technology, install date, and your accreditation.
Generation readings were taken from a separate generation meter installed alongside the inverter. Larger systems had export meters as well; smaller ones used the 50% deeming.
Payments were tax-free for domestic installations and treated as taxable income for commercial ones. The scheme was index-linked to RPI inflation, which meant the headline rate you got accredited at went up every April for the lifetime of the contract.
For a commercial solar installation that went live in 2011, the original generation tariff of around 32p per kWh would have risen to over 50p per kWh by 2025 thanks to RPI uplift.
Who was eligible
To be eligible you needed:
- An MCS-certified installer (or equivalent for non-solar) for systems up to 50 kW.
- ROO-FiT accreditation for systems above 50 kW and up to 5 MW.
- A grid connection agreement.
- A registered supplier acting as your FiT Licensee.
- Installation completed within the scheme window. Between 1 April 2010 and 31 March 2019.
The FiT was available to domestic, commercial, community, and public sector applicants. Many small UK farms, schools, churches, leisure centres, and SMEs accredited installations during the scheme.
The rates paid
FiT rates were set at the time of accreditation and held for the contract length, with RPI uplift each April. Rates were highest in the early years (when capital costs of solar were highest) and stepped down over time as solar costs fell.
Approximate generation rates for solar PV at install date:
| Install year | System size | Approx generation rate (p/kWh) |
|---|---|---|
| 2010 | Under 4 kW | 41.3 |
| 2012 | Under 4 kW | 21.0 |
| 2015 | Under 4 kW | 13.5 |
| 2018 | Under 4 kW | 3.9 |
| 2019 (final) | Under 4 kW | 3.8 |
Example only. Actual tariffs varied by system size, technology, and exact accreditation date. RPI uplift applies annually.
Larger commercial systems were paid less per kWh but generated far more total revenue. A 50 kW solar PV system accredited in 2011 might have a contract lifetime value of well over £200,000.
Why the scheme closed
The FiT closed to new applicants on 31 March 2019. Two reasons drove the closure. First, the cost of solar PV had fallen enough that the scheme was no longer needed to make installations viable. Second, the policy levy on bills had become politically uncomfortable.
The scheme’s overall impact was substantial. Around 850,000 installations across the UK got onto FiT, with combined capacity of over 6 GW. The scheme is widely credited with helping establish a UK rooftop solar industry that’s continued growing without subsidy since.
What replaced it
The Smart Export Guarantee (SEG) took over on 1 January 2020, with a brief gap after FiT closure. The SEG is structurally different.
Under SEG, suppliers above a certain size must offer at least one export tariff to small-scale generators. There’s no generation payment. Only export. Rates vary by supplier and have generally been lower than late-period FiT export rates, though some suppliers offer time-of-use tariffs that can pay well for export at peak times.
For new installations today the economic case rests primarily on offsetting your own consumption rather than on export revenue. Battery storage changes that calculation again because it shifts when you export.
Sites still on FiT
If your site has an installation accredited under FiT, the contract is binding on the supplier for 20 years (for solar PV under 50 kW) or 25 years (for larger systems and other technologies). The supplier can’t unilaterally end it.
What can affect your FiT payments:
- Switching supplier. You can switch your FiT Licensee. The new supplier inherits the contract terms.
- Site changing hands. A change of tenancy doesn’t kill the FiT contract, but it does require paperwork to transfer the registration to the new owner.
- Inverter or system changes. Replacing the inverter usually doesn’t affect FiT. Substantially altering or upsizing the system might trigger a recapacitation that resets the tariff.
- Annual generation reads. Required to trigger payments. Missing reads delays payment.
For a typical 50 kW commercial solar system accredited in 2011, residual FiT payments through to 2031 could exceed £100,000 in cumulative income. Well worth keeping the paperwork in order.
Practical checks for inherited installations
If you’ve taken over a site with an existing solar or wind installation, a few checks pay off:
- Confirm FiT registration. The previous owner should have FiT documentation showing the accreditation date, system size, and contracted tariffs. If not, your current supplier can confirm whether the site has an active FiT account.
- Check the FiT Licensee. The supplier paying the FiT may not be the same as your retail electricity supplier. Sometimes there are two separate accounts.
- Read the generation meter. Annual reads are usually required. If they haven’t been taken since the previous owner left, catching up is a phone call.
- Update ownership details. A change of tenancy requires Ofgem to be notified to transfer the FiT registration.
- Don’t confuse FiT with the Renewables Obligation. RO supports large-scale generation and is a different scheme.
If anything looks unclear, your supplier’s FiT team is the first point of contact. The Energy Ombudsman can step in for unresolved FiT disputes that have stalled.
Frequently asked questions
What is the Feed-in Tariff?
The Feed-in Tariff was a UK government scheme administered by Ofgem that paid owners of small-scale renewable electricity generators for the electricity they produced and exported between April 2010 and March 2019.
Is the Feed-in Tariff still open?
No. The FiT closed to new applicants on 31 March 2019. Installations accredited before that date keep their payments for the contracted 20 to 25 year term. New installations now fall under the Smart Export Guarantee instead.
How long do FiT payments last?
20 years for solar PV installations under 50 kW. 25 years for larger solar and most other technologies including wind, hydro, and anaerobic digestion. The clock starts from the accreditation date.
What replaced the Feed-in Tariff?
The Smart Export Guarantee, which started on 1 January 2020. SEG only pays for electricity exported to the grid, not for total generation, and rates are typically lower than late-period FiT rates.
How were FiT payments structured?
Two separate tariffs. A generation tariff paid for every kWh produced, and an export tariff paid for kWh exported. For most small systems, export was deemed at 50% of generation rather than metered.
Do FiT payments increase with inflation?
Yes. Rates are linked to the Retail Prices Index (RPI) and increase each April for the lifetime of the contract. An installation accredited in 2011 has seen its headline rate rise substantially through annual RPI uplift.
Can I still get FiT for a new solar installation?
No. The scheme is closed to new applicants. New solar installations should pursue Smart Export Guarantee tariffs and structure the economic case around offsetting your own consumption.
What happens to FiT if I sell or move premises?
The FiT contract follows the property, not the original owner. A change of tenancy requires paperwork to transfer the registration to the new occupier. Until that is filed, payments may pause.
Can I switch my FiT Licensee?
Yes. You can switch your FiT Licensee in the same way you switch electricity supplier. The new supplier inherits the contracted FiT terms; only the administrator changes.
Are FiT payments taxable?
For domestic installations, no. For commercial installations, FiT income is treated as taxable income and should be declared in your business accounts.
How does FiT differ from the Renewables Obligation?
FiT supported small-scale generation up to 5 MW. The Renewables Obligation supported large-scale renewable generation, typically utility-scale. Both schemes are closed to new applicants now.
How do I check if my site has an active FiT?
Your electricity supplier should be able to confirm whether the site has an active FiT account. The previous owner should also have FiT accreditation paperwork from when the installation went live.