Tariffs Explained


Renewable Energy Tariffs (RET) are a familiar concept in many countries. It is very welcome news to see the UK government finally adopting a similar scheme at least for smaller (<5MW) projects. The legislation that puts in place the framework is the Energy Act 2008 which has paved the way for the Feed-in Tariff for renewable electricity and the Renewable Heat Incentive (RHI) for renewable heat. This has since been updated several times as the government has sort to control costs. The FiT and RHI are in addition to the Renewable Obligation Certificates (ROC) which have been amended.

The Feed-in Tariff is different in that it is payable on total generation not just the export component. This is similar to how Renewable Obligation Certificates are paid. There is also a separate export component for electricity exported to the grid. The Feed in Tariff is for electricity generation such as wind, solar PV and hydro schemes. Please refer to the Feed-in Tariff section for more detail. The government originally branded this scheme Clean Energy Cashback for domestic consumers although this term is not really used any more. Those of you in the renewable energy industry will probably be familiar with the concept of feed-in tariffs as implemented in other countries.

The scheme is administered by OFGEM with whom you must register (either directly or indirectly depending on your generator size) to receive FiTs once your generator is connected to the grid. The have published a short guide to the FiTs.

The Renewable Heat Incentive is for heat generation from renewable sources such as heat pumps, solar thermal and biomass. There are radically different schemes for non-domestic and domestic installations.

ROCs are really only worthwhile for larger schemes. Since the government published the Electricity Market Reform documents a new support scheme called Contract for Difference (CfD) is being introduced to replace ROCs.