The Feed-in Tariff (FiT) is a closed scheme in Scotland, and across the entire UK, meaning it is no longer open to new applications. It was a UK Government initiative designed to incentivise homeowners and businesses generating electricity from renewable sources, such as solar panels, wind turbines, and hydropower.
The Feed-in Tariff (FiT) Scheme: A Historical Overview
Launched in April 2010, the FiT scheme provided payments to individuals and organisations for the renewable electricity they generated, even if they used it themselves. It also offered an additional payment for any surplus electricity exported back to the National Grid.
Key aspects of the FiT scheme included:
- Generation Tariff: A fixed payment for every unit (kWh) of renewable electricity generated, regardless of whether it was used or exported. The rate depended on the technology, installation size, and the date of installation.
- Export Tariff: An additional payment for every unit of eligible electricity exported to the grid. This was often based on a deemed export rate (e.g., 50% of generation) if an export meter wasn't installed.
- Eligibility: Installations had to be certified under the Microgeneration Certification Scheme (MCS) and installed by an MCS-accredited installer.
- Duration: Payments were guaranteed for a fixed period, typically 20 years for solar PV and 10 years for other technologies, from the date of registration.
When Did the FiT Scheme End?
The FiT scheme officially closed to new applications on 31 March 2019. This means that any renewable energy system installed and registered after this date is not eligible for FiT payments.
Important Note: While the scheme is closed to new applicants, existing participants who joined before 31 March 2019 continue to receive their guaranteed FiT payments for the remainder of their eligible period.
The Current Landscape: Smart Export Guarantee (SEG)
Following the closure of the FiT scheme, the UK Government introduced the Smart Export Guarantee (SEG) on 1 January 2020. The SEG is the successor scheme and offers a different approach to incentivising small-scale renewable energy generation.
Key differences and features of the SEG:
- Obligated Suppliers: Larger electricity suppliers (those with over 250,000 domestic customers) are required by law to provide an SEG tariff. Smaller suppliers can offer one voluntarily.
- Payment for Exported Energy: Unlike FiT, SEG only pays for electricity exported to the grid. There is no generation tariff for the power you use yourself.
- Variable Rates: Suppliers set their own SEG rates, which can vary. Some offer flat rates, while others offer dynamic tariffs that change based on the time of day or market prices.
- Smart Meter Requirement: To participate in the SEG, you typically need a smart meter capable of recording your export electricity.
- Eligibility: The SEG is available for installations up to 5 MW capacity (or 50 kW for hydro/anaerobic digestion), including technologies like solar PV, wind, micro combined heat and power (CHP), hydro, and anaerobic digestion. The installation must be MCS certified or equivalent.
FiT vs. SEG: A Quick Comparison
To better understand the shift, here's a comparison of the key features:
| Feature | Feed-in Tariff (FiT) | Smart Export Guarantee (SEG) |
|---|---|---|
| Status | Closed to new applications (from 31 March 2019) | Active for new installations (from 1 January 2020) |
| Payment Type | Generation Tariff (for all generated power) + Export Tariff (for exported power) | Export Tariff only (for exported power) |
| Payment Rates | Fixed, government-set rates (declined over time) | Set by individual electricity suppliers (variable) |
| Obligation | Obligated energy suppliers administer payments | Larger suppliers are obligated to offer a tariff |
| Meter | Standard meter (often estimated export) | Smart meter typically required for accurate export readings |
| Goal | Incentivise installation and usage of renewables | Incentivise export of surplus renewables to the grid |
While the Feed-in Tariff is no longer available for new systems, the Smart Export Guarantee continues to support homeowners in Scotland looking to benefit from generating and exporting their own renewable electricity.
