Right, let’s talk about the Feed-in Tariff scheme. Or rather, let’s talk about what it was, because here’s the thing – if you’re reading this hoping to sign up for it, I’ve got bad news. The scheme closed to new applicants on 31st March 2019.
But before you click away, there’s still important stuff to know here. If you’ve already got solar panels on the Feed-in Tariff, you need to understand what you’re entitled to. And if you’re new to solar, you need to understand what replaced it and why the “good old days” everyone goes on about are actually… well, gone.
Let me break it all down.
What Was The Feed-in Tariff?
The Feed-in Tariff (FiT) was a government scheme that launched in April 2010 to encourage people to install renewable energy systems, mainly solar panels.
The deal was brilliant. The government paid you for:
- Every unit of electricity you generated – even if you used it yourself (the Generation Tariff)
- Every unit you exported to the grid – the surplus you didn’t use (the Export Tariff)
And these payments were guaranteed for 20-25 years, adjusted annually for inflation, and completely tax-free.
It was proper generous. In 2010, the initial generation tariff for solar panels was a whopping 43.3p per kWh. Some people who got in early were on even better rates – 71.5p per kWh if you installed before August 2010.
To put that in perspective, electricity only costs about 25p per kWh to buy now. So you were being paid nearly triple what electricity was worth just for generating it. Mental.
Why Was It So Generous?
Back in 2010, solar panels were expensive. Like really expensive. A typical system cost £12,000-£15,000, compared to £6,000-£8,000 now.
The government wanted to kickstart the solar industry and make it worth people’s while to invest that kind of money. The generous tariffs meant you’d get your money back in 7-10 years, then continue earning for another 10-15 years.
And it worked. In the first year alone, there were 28,028 domestic solar installations. The scheme was massively successful at getting solar panels on roofs.
How The Scheme Actually Worked
If you got on the FiT scheme (and you can’t anymore, remember), here’s what happened:
The Generation Tariff
You got paid for every kilowatt-hour (kWh) of electricity you generated, regardless of whether you used it or exported it to the grid.
The rate depended on:
- When you installed your system
- The size of your system (measured in kW)
- Your property’s energy efficiency rating
- What type of renewable technology you used
For solar panels specifically, rates started at 43.3p/kWh in 2010 but steadily decreased as panel costs came down. By 2019 when the scheme closed, new applicants were only getting around 3.79p/kWh.
The Export Tariff
On top of the generation payment, you could also send any surplus energy you did not use to the electricity grid and get an extra payment for the exported electricity.
The original export tariff rate was 3p/kWh, but it was increased to 4.50p/kWh for new solar systems installed after 1 August 2012.
The “Deemed” Export Thing
Here’s where it gets a bit weird. Most people on the FiT didn’t have export meters to measure exactly how much electricity they sent to the grid.
Instead, many FITs claimants’ export tariff payments are ‘deemed’. ‘Deemed’ export tariff payments cover 50% of your generated electricity, regardless of how much electricity you export to the grid.
So if your panels generated 3,000 kWh per year, you’d automatically get paid export tariff on 1,500 kWh whether you actually exported that much or not.
This worked brilliantly for people who were out all day and exported loads. Not so great if you were home using most of your generation.
The Contract Terms
Anyone with solar panels who joined the Feed-in Tariff before 1 August 2012 received a 25-year contract, while people signing up with solar after that point got a 20-year contract.
The payments were guaranteed for that entire period. Your energy supplier paid you quarterly (or sometimes annually).
And the best bit? They change in line with the Retail Price Index, meaning that in April 2025 – for example – Feed-in Tariff rates rose by 3.5%.
So your payments increase with inflation every year. Lovely stuff.
Why Did The Scheme Close?
By 2018, the government decided enough was enough. Solar panel costs had dropped dramatically, the industry was established, and the scheme was getting expensive to run.
The costs were being spread across everyone’s energy bills, and with millions of installations, that added up to billions.
Plus, the government reckoned solar panels had become cheap enough that people didn’t need massive subsidies anymore to make them worthwhile.
So on 31st March 2019, the FiT scheme closed to new applicants. No warning extension, no replacement ready to go. Just… closed.
Current Feed-in Tariff Rates (For Existing Recipients)
If you’re already on the scheme, you’re still getting paid. FiT recipients will continue receiving payments until 2039, when the last 20-year contracts (handed out in 2019) end.
Generation Tariff Rates (April 2025 – March 2026)
These vary hugely depending on when you signed up. Some examples:
If you installed between April 2010 and March 2011 with a standard 4kW system, you currently earn 62.67p for every kWh your system produces.
That’s insane compared to today’s electricity prices. You’re literally printing money.
If you installed later (say 2015-2019), your rate will be much lower – probably somewhere between 4p and 15p per kWh depending on exactly when.
Export Tariff Rates (April 2025 – March 2026)
The export rates are different too. As of April 2025, the export rate is 5.25p per kWh for solar installations that were finished between 1 April 2010 and 31 July 2012, and 7.39p per kWh for systems registered from 1 August 2012 to 31 March 2019.
These rates also increase with RPI every year.
A Real Example
Let’s say you installed a 4kW system in March 2011. Your annual payments might look like:
- Generation: 3,500 kWh generated × 62.67p = £2,193.45
- Export: 1,750 kWh deemed export × 5.25p = £91.88
- Total FiT payment: £2,285.33 per year
- Plus your electricity savings: Maybe another £400-500 from using your own power
Total benefit: Around £2,700-£2,800 per year. For a system that originally cost maybe £12,000-£15,000, and you’ve had it for 14 years, you’re well into profit territory.
Can You Switch Energy Suppliers?
Yes, and you should check if there’s better deals out there.
You can switch FiT suppliers, but it won’t alter your payments. Your tariff rates are fixed by when you joined the scheme, not who pays you.
What you CAN do is switch to a supplier with better electricity rates for the power you buy from the grid. That’s separate from your FiT payments.
The Smart Export Guarantee (SEG) – The “Replacement”
When the FiT closed, the government introduced the Smart Export Guarantee (SEG) in January 2020.
But calling it a replacement is generous. It’s more like a really rubbish cousin that turned up uninvited.
How SEG Works
Energy suppliers with 150,000+ customers must offer you at least one export tariff. They pay you for electricity you export to the grid.
That’s it. No generation payment. Just export.
The rates vary wildly:
- Basic SEG tariffs: 1-5p per kWh (rubbish)
- Better tariffs: 10-15p per kWh (Octopus, OVO, etc.)
- Variable tariffs: Can be 0p to 40p+ depending on time of day (Octopus Agile)
The best current rate is around 15p per kWh from Scottish Power and Octopus Energy.
The Key Difference
With FiT, you got paid for ALL generation plus exports. With SEG, you ONLY get paid for exports.
That’s a massive difference. Under FiT, a 4kW system earning 43p per kWh generation tariff would make you £1,500+ per year just from generation, before any export payments.
Under SEG? You might export 1,500 kWh at 15p per kWh = £225 per year.
See the problem?
Can You Switch From FiT Export to SEG?
Here’s something interesting. You can also switch from your FiT export rate to a Smart Export Guarantee export tariff, potentially earning hundreds of pounds more per year without giving up your FiT generation tariff.
Wait, what?
Yeah. Your generation payment is separate from your export payment. You can keep your (guaranteed, inflation-linked) generation tariff, but switch to a better SEG export rate.
This makes sense if your FiT export rate is 5.25p but you can get 15p from Octopus. That’s triple the money for your exports.
The Catch
Remember that deemed export thing? If you’re using more than 50% of your generated electricity, installing a smart meter and moving to ‘actual’ export could mean you reduce your payments, even if the SEG tariff is a higher price per kWh than your FITs export tariff.
Let’s say you generate 3,000 kWh but use 2,000 kWh yourself, only exporting 1,000 kWh.
- On FiT deemed export (50%): 1,500 kWh × 5.25p = £78.75
- On SEG actual export: 1,000 kWh × 15p = £150
In this case, SEG is better.
But if you only export 500 kWh:
- On FiT deemed export: 1,500 kWh × 5.25p = £78.75
- On SEG actual export: 500 kWh × 15p = £75
You’d lose money switching.
Work out your actual export before switching.
Can You Add More Panels?
You can add additional capacity to your installation, for example, additional solar PV panels, without affecting your current FITs payments. However, you cannot apply for additional FITs payments for the ‘new’ capacity.
So if you’ve got a 3kW system on FiT and want to add another 2kW, you can. The original 3kW keeps getting FiT payments, the new 2kW goes on SEG (or nothing if you don’t sign up for SEG).
Whether this makes financial sense depends on your current FiT rate and how much you’d save/earn from the extra panels.
What Happens If You Move House?
The FiT payments stay with the property, not you personally.
So if you sell your house, the new owner takes over the FiT contract and receives the payments. This can actually increase your property’s value – buyers love houses with FiT schemes attached.
If you’re buying a house with FiT, make sure the solicitor transfers the contract properly. You need to contact the FiT licensee (the energy supplier making payments) and register as the new owner.
Were There Any Downsides to FiT?
Honestly? Not for the people who got on it. It was brilliant for them.
The downsides were:
- Expensive for taxpayers/energy bill payers – We all paid for it through slightly higher bills
- Becoming unsustainable – As more people joined, costs spiralled
- Created inequality – People who got in early made a fortune, people who hesitated missed out entirely
There were also some restrictions:
For example, if you own a standard 4kw-10kw solar system with an eligibility date between 1 April 2010 and 31 March 2011, you currently earn 62.67p for every kWh your system produces, but from April 2012 onwards, homeowners needed an Energy Performance Certificate with at least a Band D rating to qualify for the highest payment rates.
This caused a massive rush in March 2012 as people tried to get systems installed before the requirement kicked in.
The Free Solar Panel Companies
Remember those “free solar panels” companies that were everywhere around 2011-2014?
They worked by installing panels on your roof for free, but THEY kept the FiT payments for 20-25 years. You got free electricity during the day, they got the payments.
Most of these companies have now gone bust or sold their contracts to bigger firms. If you’ve got one of these arrangements, the payments are still being made to whoever owns the contract now.
Was it a good deal? Depends. You got free panels and some free electricity, but missed out on potentially £30,000-£50,000 in FiT payments over 25 years.
What About Other Technologies?
FiT wasn’t just for solar. It also covered:
- Wind turbines – Domestic wind was never that popular (noisy, less reliable, planning issues)
- Micro-CHP (Combined Heat and Power) – Barely took off, only 98 installations in the first year
- Hydropower – Small hydro systems got good rates if you had a stream
- Anaerobic Digestion – Mostly for farms, not domestic
In the first year, domestic solar performed well with 28,028 of the 28,614 total solar installations. Solar dominated the scheme by a massive margin.
Is There Any Hope For FiT Coming Back?
Short answer: No.
The government’s been clear they have no plans to reopen or replace the FiT scheme with anything similar.
The focus now is on:
- Heat pumps (through the Boiler Upgrade Scheme)
- Insulation (through ECO4 and other schemes)
- Making renewables work without subsidies
Solar panels are cheap enough now that the government reckons you don’t need the FiT anymore. And financially, they’re probably right – solar still pays for itself in 10-12 years even without FiT.
But it definitely takes longer than it did in the golden years.
The Bottom Line For New Solar Customers
If you’re getting solar panels in 2025, here’s what you get instead of FiT:
✅ 0% VAT – That’s a 20% saving on installation costs ✅ Smart Export Guarantee – 10-15p per kWh exported (if you choose a good supplier) ✅ Electricity bill savings – Around £400-600 per year for a typical system ✅ Battery storage – Also at 0% VAT, much better than FiT-era technology
What you DON’T get: ❌ Generation payments ❌ Guaranteed inflation-linked income for 20-25 years
❌ The smug satisfaction of getting in early
Is it still worth getting solar? Yes, absolutely. The payback is 10-12 years typically, and panels last 25-30 years. So you’re still looking at 15-20 years of basically free electricity.
But the returns are nowhere near as good as people who got on FiT in the early years.
The Bottom Line For Existing FiT Recipients
If you’re already on FiT:
✅ Keep getting your payments – They’re guaranteed until your contract ends ✅ Consider switching to SEG for exports – But do the maths first ✅ Make the most of your generation tariff – It’s worth way more than current electricity prices ✅ Maintain your system – You need it working to keep getting paid ✅ If you move, make sure the new owner takes over the contract properly
You’ve got one of the best renewable energy deals ever offered in the UK. Look after it.
Final Thoughts
The Feed-in Tariff was genuinely one of the best government schemes for encouraging renewable energy ever created. It worked exactly as intended – it got solar panels on hundreds of thousands of roofs and kickstarted an entire industry.
People who got on it early made out like bandits. Someone who installed a 4kW system in 2010 for £12,000 will have earned back around £40,000-£50,000 by the time their contract ends in 2035. That’s a proper return on investment.
But it’s gone now. And it’s not coming back.
For new installations, you’ve got to make peace with the fact you missed out on the golden era. Solar’s still financially worthwhile, still good for the environment, still adds value to your home. Just not quite the money-printing machine it was for the FiT generation.
If you’re on FiT already? Congratulations. You made a smart decision at the right time. Just make sure you understand your contract and you’re getting paid correctly.
And if you’re considering solar now? Don’t let the loss of FiT put you off. It’s still one of the best home improvements you can make financially. You’ll just have to wait a bit longer for the payback than the lucky ones who got in early.