Glossary · UK
What is Feed-in Tariff (FIT)?
A closed government scheme that paid households a guaranteed rate for renewable electricity they generated and exported, now replaced for new installations by the Smart Export Guarantee.
Full Definition
The Feed-in Tariff (FIT) was a government scheme, running from April 2010 to March 2019, that paid households and small generators a guaranteed rate for renewable electricity produced by eligible technologies such as solar photovoltaic (PV) panels, wind turbines and micro-hydro, through two separate payments: a generation tariff, paid on every unit generated regardless of whether it was used or exported, and an export tariff, paid on units exported to the grid. Rates were index-linked (rising each year with inflation) and locked in for the lifetime of the contract, typically 20 years for solar installations, which is why households who joined in the scheme's earlier years, when generation tariffs were considerably higher than today's rates, are still receiving generous guaranteed payments well into the 2030s. The scheme closed to new applicants on 31 March 2019 and was replaced by the Smart Export Guarantee (SEG), which only covers exported electricity (there is no equivalent to the old generation tariff) and does not guarantee a minimum rate, leaving households to shop around between suppliers. Existing FIT recipients continue to receive their generation and export payments for the remainder of their fixed term under the original scheme rules and cannot switch to SEG for the same installation while still FIT-registered; FIT income is generally tax-free for a genuine domestic microgeneration installation used mainly to power the household's own home.