Feed-in Tariff Levy

The Feed-in Tariff (FIT) scheme started on 1 April 2010 to encourage small-scale low-carbon generation such as rooftop solar PV, wind, hydro, anaerobic digestion and micro CHP. Accredited generators earn payments for the Elec they generate and export, paid by the supplier they register with, known as a FIT licensee. Section 41 of the Energy Act 2008 gave the government the power to write the scheme into Elec licences, and the Feed-in Tariffs Order 2012 sets the rules.

Ofgem runs levelisation, which spreads the total cost across every licensed Elec supplier in Great Britain by its share of the supply market. Each quarter a supplier either pays into or draws from a central fund, depending on what it paid its own FIT generators. An annual round then reconciles the four quarters. Suppliers recover the cost from customers per MWh supplied.

Key facts:

• Closed to new applicants from 1 April 2019; existing generators keep their payments for 10 to 25 years
• Covered installations up to 5 MW (2 kW for micro CHP)
• Periodic levelisation each quarter; Ofgem must finish annual levelisation by 1 October
• Elec supplied to eligible energy intensive industries is 100.0% exempt from 1 April 2024, up from 85.0%
• Ofgem's price cap model publishes a FIT cost estimate in £/MWh for each six-month period, applied across both quarterly cap periods

EnergyCode includes the FIT levy in the Pricing Engine, using Ofgem's published £/MWh day-weighted across the contract window.