Business energy Feed-In Tariffs (FiT)
All businesses want to cut costs where possible – and choosing green energy is one of the best ways to do just that. What’s more, your business’s reputation will improve. Customers are now often looking to companies that have and promote responsibility towards the environment.
There’s also the opportunity to make money with green energy. Once you’ve installed your own renewable energy technology, you can sell the energy you produce back to the National Grid. If you are part of a Feed-In Tariff, any energy made via your own sustainable energy system can be sold back to energy suppliers.
But you won’t want just any Feed-In Tariff; you’ll want to find the best energy company for FiT payments. This doesn’t just mean how much you’ll earn. Often, what is the best Feed-In Tariff rate for one business, is not for another.
What is a FiT tariff?
FiT is a government subsidy which rewards businesses who create their own energy. With the introduction of the Paris Agreement and various other national and global environmental requirements, countries have had to look at ways to reduce their carbon footprint.
One of these methods is the introduction of FiT. Put most simply, a business energy Feed-In Tariff allows businesses to sell back any produced energy to energy suppliers. This is to lessen the dependence on energy imported from abroad and via unsustainable methods, such as the burning of fossil fuels.
With a Feed-In Tariff, you are rewarded not only for generating the electricity you use but for exporting any excess energy back to the National Grid. This means you can receive payments for generating and using your own electricity and sharing the energy you do not need.
There are two types of tariff under the FiT umbrella:
- Generation Tariff – When on this type of FiT tariff, you’ll be paid for every kWh of electricity you generate, whether you use it yourself or not.
- Export Tariff – This type of FiT tariff allows you to make money on surplus electricity exported back to the National Grid.
Whichever type of Feed-In tariff you apply for, you’ll be able to save money. That’s because you’ll be using your own business electricity instead of buying it from an external source.
Current estimates have energy prices at 11-15p per kWh whereas the cost of producing your own is around 5p per kWh. On a Feed-In tariff, you’ll not only be saving up to 10p per kWh but receive payments for the privilege too! And with energy prices set to double in the next ten years, you’ll avoid any major price increases.
The Feed-in Tariff (FIT) scheme closed for new applications on March 31, 2019.
If your business had an eligible system installed before this date, and you have already successfully applied for FITs payments, you'll not be affected by the scheme closure.
If your business has installed an eligible system with an MCS certificate dated on or before March 31, 2019, you have until March 31, 2020 to apply to the scheme.
If your business didn’t install an eligible system on or before March 31 2019, you won't be eligible for FITs payment.
Why has the FIT scheme ended?
The FIT scheme was introduced by the government in 2010, with the aim of having 750,000 eligible solar PV systems installed by 2020.
But the scheme was so popular that 730,000 eligible systems had already been fitted by 2015. This unexpectedly large demand, coupled with a dramatic fall in installation costs, saw the scheme’s funding cut and its closure brought forward by a year.
On July 19, 2018 the government confirmed that the FIT scheme would be ending on March 31, 2019.
What does the FIT closure mean for your business?
If your business has already signed up to the FIT scheme, your payments will continue as normal, right up until your solar PV system is 20 years old.
If you're not already signed up, you’ve now missed March 31 deadline, meaning you won't be eligible for FIT payments. It’s thought the scheme won’t replaced by any similar government scheme until at least 2025, but it’s worth keeping an eye for alternative schemes run by your business energy supplier.
What is the best energy company for FiT payments?
There’s no set answer to which is the best energy company for FiT payments. As every business is different, there’ll be different levels of energy production and different systems used to produce that energy too. What’s most important is to find the best energy company for FiT payments for your business specifically – rather than a general answer which will almost always be inaccurate.
First, you’ll need to decide on which type of renewable energy equipment you are going to use. The most common are solar panels and wind turbines. But, it’s also worth considering hydroelectricity, anaerobic digesters and micro-combined heat and power systems (CHP).
To be eligible for a FiT tariff, you’ll also need to follow these steps:
- Register your generation address with the Post Office.
- Ensure your generation capacity is under 5MW.
- Have your installation and installer certified under the Microgeneration Certification Scheme (MCS).
After your equipment has been installed, you’ll receive a certificate of MCS compliance. This will allow you to become registered on the Ofgem central FiT register and, most importantly, apply for a Feed-In Tariff.
To find the best energy company for FiT payments, you have two options.
- Ring each FiT Licensee independently and compare Feed-In tariff rates one-by-one.
- Use brokers like MoneySuperMarket to search the market for the best FiT deals.
The second option will save you hours of phone calls and allow you to take advantage of relationships built with a wide variety of national and independent FiT Licensees. What’s more, having an energy expert involved with your negotiations will ensure nothing is missed in your application. This will include information about government subsidies and funding options, helping you cut costs even further.
To compare Feed-in Tariff rates, all you need is to supply the following information:
- Your MSC compliance certification number
- Your application form
- Meter readings taken on the day of your application
- Proof that you own the renewable energy generation technology
- Any necessary signed declarations
- Your premises’ EPC (if required).
It’s worth being aware that some renewable energy systems will need further checks. For example, solar installations which are to be used for FiT will require an evaluation of your EPC. That’s why we recommend using a broker like MoneySuperMarket to find the best Feed-In Tariff rates. We will prepare your application in full, meaning you won’t have to go back and forth with different information on a range of different phone calls.
To switch business energy supplier, give us a call now on 0800 088 6986.