Feed-in tariffs (FITs) toolkit
A guide to Practical Law Environment's materials on feed-in tariffs (FITs), which are guaranteed payments, for a fixed period of time, to generators of low-carbon electricity on a small scale.
This toolkit gathers together the key materials produced by PLC on feed-in tariffs (FITs).
Note that FITs are sometimes also referred to as the clean energy cashback scheme.
Feed-in tariffs in a nutshell
This section of the note explains feed-in tariffs (FITs) in a nutshell. For a detailed explanation of FITs, see Overview materials below.
FITs are a financial incentive for electricity generated from small-scale low-carbon sources, to help the UK meet its climate change and renewable energy targets.
They consist of guaranteed payments, for a fixed period of time, to producers of low-carbon electricity on a small scale, paid per-kiloWatt hour (p/kWh) of electricity generated. The intention is that the payment helps the renewable electricity generator to overcome the cost disadvantages of renewable energy sources. FITs are sometimes also referred to as "clean energy cashback".
FITs came into force in Great Britain on 1 April 2010 and are administered by Ofgem.
The government has also introduced financial incentives for renewable heat in the form of the Renewable Heat Incentive (RHI) (see Practice note, RHI: Renewable Heat Incentive (www.practicallaw.com/9-505-2881)).
The FITs scheme imposes an obligation on electricity suppliers in England, Wales and Scotland with a minimum of 50,000 domestic customers to offer FITs to all accredited small-scale generators of electricity using a low-carbon energy source that is eligible under the scheme. Electricity suppliers with fewer than 50,000 domestic customers can offer FITs on a voluntary basis.
The scheme provides a fixed payment for electricity that is generated on-site (generation tariff) and for any unused electricity that is exported to the national grid (export tariff). FITs are available to everyone, including businesses, landlords, local authorities and households.
The scheme applies to installations with a generating capacity of 5 megawatts (MW) or less. Installations with a larger capacity may be eligible for financial incentives under the Renewables Obligation (RO) (see Practice note, Renewables Obligation (www.practicallaw.com/0-204-8340)).
The government is required to carry out regular reviews of the FITs scheme, including tariff levels. However, following higher take-up than expected, the government has been carrying out earlier than scheduled reviews, in stages. It has also modified the scheme. Some of the changes and proposals have been highly controversial and subject to judicial review challenges (see Practice note, Feed-in tariffs (FITs): overview: Reviews of FITs (www.practicallaw.com/7-500-4773)).
The rest of this note explains where you can find more information about FITs.
For more information on:
Renewables in general, see Practice note, Renewable energy: overview (www.practicallaw.com/7-380-7949).
Microgeneration in general, see Practice note, Microgeneration (www.practicallaw.com/2-385-0884).
For a detailed explanation of FITs, see:
Property and planning issues
Public sector issues
For information on the tax treatment of FITs and FITs plant and machinery, see Practice note, Feed-in tariffs (FITs): overview: Taxation of FITs (www.practicallaw.com/7-500-4773).
Legislation and guidance
For information on legislation and guidance on FITs, see Practice note, Feed-in tariffs (FITs): overview: FITs legislation and guidance (www.practicallaw.com/7-500-4773).
Consultations and responses
For more information, see (in date order):
Legal update, Government consults on Renewable Electricity Financial Incentives, including FITs (www.practicallaw.com/1-386-6932) and Legal update, DECC publishes final details of feed-in tariffs (FITs) (www.practicallaw.com/6-501-3829).
Legal update, CERT, CESP and FITS: DECC consults on increasing customer threshold so smaller energy suppliers are not obligated (www.practicallaw.com/6-504-4430) and Legal update, Small energy suppliers to be taken out of the Carbon Emissions Reduction Target and the Community Energy Saving Programme (www.practicallaw.com/2-506-5052).
Legal update, Government consults on FITs for anaerobic digestion and large-scale solar photovoltaic generation (www.practicallaw.com/5-505-3415) and Legal update, FITs: DECC confirms that it will cut feed-in tariffs for large-scale solar installations (www.practicallaw.com/2-506-4175).
Legal update, HMRC consults on proposals to clarify capital allowances for FITs and RHI plant (www.practicallaw.com/1-506-3925) and Legal update, Government responds to consultation on capital allowance treatment of FITs and RHI plant (www.practicallaw.com/9-516-3068).
Legal update, FITs: DECC consults on changes to rules for extensions to installations (www.practicallaw.com/2-507-0826) and Legal update, FITs Order closes installation extension loophole (www.practicallaw.com/0-508-8224).
Legal update, FITs consultation proposes reduced support for smaller solar PV generation (www.practicallaw.com/0-510-2456), Legal update, Government lays draft licence modifications for reduced FITs before Parliament (www.practicallaw.com/1-517-3311) and Legal update, FITs review: Phase 2A and B consultations and government's response to Phase 1 consultation (www.practicallaw.com/3-518-0037).