What is the concept of Feed-in Tariffs and how does it impact the sale of energy?
The Feed-in Tariff is a government initiative predating the SEG scheme, designed to promote small-scale renewable energy generation. It aimed to generate electricity and incentivize businesses and homeowners to adopt low-carbon, ‘green’ infrastructure such as solar panels.
The concept behind this program was that customers, both domestic and non-domestic, participating in this tariff would not only benefit from savings on their energy expenses but would also receive payments for selling any surplus energy back to the electricity suppliers themselves.
As of March 31, 2019, the Feed-in Tariff (FIT) is no longer open and is not taking in new applications.
By setting up systems such as solar panels at your business location and producing a portion of your electricity, you lessen your dependence on power from the grid. This, in turn, is likely to result in savings on your business energy bills because you’re purchasing less energy.
The actual savings can vary based on the energy needs of different businesses. For instance, if you own a cafe and decide to install solar panels on the roof, the initial installation cost might be around £6,000. However, you’ll start saving on your energy expenses. In about six to ten years, post the recovery of installation expenses, your dependency on grid energy will reduce, and your total expenses are expected to be lesser than if you hadn’t installed the system.