Feeded-in tariffs are new measures introduced by the government to support the uptake of microgeneration technologies in the UK. To help you understand what FITs are and how you could benefit from their introduction we have put together a set of frequently asked questions that explain everything.

Please note that the design of feed-in tariffs is currently being discussed as part of the government's 'Department of Energy & Climate Change website' and could be subject to change prior to their introduction in April 2010.

On 1st February 2010 The Government confirmed the feed in tariffs which will come into force on 1st April 2010.

For someone fitting a typical2.5kW photovoltaic solar system to an existing home, a payment of 41.3p per KWh generated will be paid whether that electricity is exported or used by the home owner. A further payment of 3p per kWh will be made for each unit not used and therefore exported to thegrid. New-build properties fitted with solar panels will receive a lowertariff of 36.1p per kWh generated.

These tariff payments are guaranteed for 25 years and they are also indexlinked - i.e. they will rise in line with inflation. The typical 2.5kWsystem will generate tax-free payments of around £1000 per year, and so the payback on the investment will be around 12 years. This also works out as a tax-free return on investement of 8% - far better than any bank account offers, and particularly attractive to those paying tax at the higher rate. Since the electricity generated can be used by thehomeowners, they are also rewarded with a £150 reduction in theirelectricity bill with a 2.5kW system.

• Householders are still eligible for the £2500 LCBP grant, extended until the end of March 2010
• Subsidised tariff is for all generated electricity, whether consumed or exported.
• Tariff for <4kW new build PV installs is 31p/unit (in year one
• Tariff for <4kW retro-fit PV installs is 41.3p per kW
  
• All accredited installs from July 2009 onwards will be eligible
• Guaranteed for up to 25 years
• Reduction in tariff of 7% per annum (The tariff for an install will be fixed for 25 years based on the year it's installed).
• Fixed price for electricity export of 9p/unit.
  

Below are some example scenarios, based on a retro-fit PV install before April 2010, hence including the £2500 LCBP grant. Figures will differ on an intergrated installation or ground mounted system.