What Are Feed In Tariff Rates?
Feed in tariff rates are the prices paid to households and businesses for exporting surplus electricity generated from renewable sources, like solar panels, back to the national grid. These rates are typically set by the government or energy regulator and vary depending on the technology installed and the specific scheme operating at the time of installation.
- Export payments are for surplus electricity sent to the grid.
- Rates depend on your installation type.
- Older schemes have different rates to newer ones.
- Compare your tariff against current market offerings.
Historically, the Feed-in Tariff (FiT) scheme in the UK offered generous, guaranteed rates for generation and export, encouraging the uptake of solar power. While the original FiT scheme is now closed to new applicants, understanding its principles helps clarify how current export payments function.
The Transition to Smart Export Guarantee
For new installations or those whose FiT generation tariff has expired, the Smart Export Guarantee (SEG) is the primary mechanism for export payments. The SEG requires all large energy suppliers to offer a tariff for exported electricity. Crucially, SEG tariffs are set by individual suppliers, meaning the feed in tariff rates you receive can differ significantly between providers. This shift provides more choice but requires proactive comparison to secure the best feed in tariff rates.
This means you're no longer tied to the rate offered by your original electricity supplier if you generated your own power. You can now shop around for the SEG tariff that offers the most favourable rates for the electricity you export.
Understanding Your Export Payment Rates
Why do the rates for exporting electricity change, and how can you ensure you're getting a fair deal? The actual feed in tariff rates you receive depend on several factors. For those on older, qualifying FiT contracts, the rate is fixed for the duration of the contract, offering stability. However, for those under the SEG, the situation is more dynamic.
Factors Influencing SEG Tariff Rates
Energy suppliers set their own SEG tariffs, and these are influenced by wholesale electricity prices and their own business models. Some tariffs are fixed for a period, offering predictability, while others might be variable, tracking wholesale market prices. It's worth noting that some suppliers offer higher rates if you also use them for your main electricity supply, though this isn't a requirement to participate in the SEG scheme. Always check if there are any conditions attached to their smart export guarantee rates.
A key benefit of the SEG is that it encourages competition, driving better feed in tariff prices for consumers. If your current energy provider isn't offering competitive smart export guarantee rates, you have the freedom to switch to a different supplier that does. The process involves notifying your current supplier and then applying to your chosen new supplier, ensuring you have the necessary meter readings and installation details to hand.
The ability to choose your export tariff provider under the SEG scheme is a significant advantage, allowing you to actively manage your renewable energy income.
Shop around for SEG tariffs at least once a year, or whenever you see significant shifts in energy market prices, to ensure you're always benefiting from the best available feed in tariff rates.
What to Compare for the Best Returns
When comparing different feed in tariff rates, consider these points: the pence per kilowatt-hour (p/kWh) offered for exported electricity, any restrictions on the amount you can export, whether the tariff is fixed or variable, and any required tie-ins with your main electricity supply contract. Look for providers that offer clear, transparent terms and straightforward payment processes. The goal is to find a seg tariff comparison that highlights the most profitable option for your specific generation levels.
Maximising Income from Exported Electricity
Achieving higher income from your renewable energy system isn't just about having the best feed in tariff rates; it's also about smart energy management. Understanding when you generate the most power and when demand is highest can help you align your exports for greater financial benefit. For instance, solar panels typically generate most during sunny daylight hours, which often coincides with peak electricity demand.
Smart Export Guarantee Scheme Benefits
The Smart Export Guarantee (SEG) scheme, while focused on export rates, implicitly encourages efficient energy use. By being paid for exported power, you're incentivised to generate as much as possible. If you have a smart meter, your supplier can monitor your exports accurately, ensuring you're paid for every kilowatt-hour sent back. This technology is central to the smooth operation of seg tariff schemes.
Consider pairing your generation with energy storage solutions, like home batteries. While this requires an upfront investment, it allows you to store excess energy generated during peak production times and use it later in the day or night when grid electricity is more expensive. This reduces your reliance on grid power and maximises the amount of electricity you export at your chosen feed in tariff rates. It’s a way to effectively 'sell' your stored energy back to yourself at a rate higher than you might get from the grid.
Investigate if your solar panel installer or energy provider offers advice or packages for home battery installations, as these can significantly enhance the financial returns from your renewable setup.
Is a Feed In Tariff Still Worth It?
For new installations, the SEG is now the primary route for export payments. While the rates may not be as high as some historical FiT export tariffs, they are still a valuable income stream. Combined with the savings on your electricity bills from using your own generated power, investing in solar remains a sound financial decision for many. Always conduct a thorough seg tariff comparison and consider the long-term savings alongside export income when evaluating the overall benefit.