The Feed-in Tariff scheme (FiT) was closed to new applicants in 2019 but it is worth it for new energy suppliers to learn what it was and how it functioned as it often still makes the headlines as some suppliers struggle to meet their obligations.

What was the FiT scheme?

Licensed electricity suppliers are defined as Mandatory FiT licensees if they have at least 250,000 domestic customers at 31 December of the immediately preceding FiT year. These licensees are obligated to register and make FiT payments to certain eligible generators.

Licensed electricity suppliers with fewer than 250,000 domestic customers can elect to register and make FiT payments to certain eligible generators. These licensees are classed as Voluntary FiT licensees and are required to remain in the FiT scheme for the duration of the FiT year (1 April – 31 March) in which they enter.

By 14 February of each FiT year all licensed electricity suppliers must notify Ofgem whether they will be a Mandatory FiT licensee, a Voluntary FiT licensee or a non-FiT licensee for the FiT year starting on 1 April following the FiT notification.

Ofgem gather licensed electricity suppliers’ customer data, to determine Mandatory FiT licensee status, as part of its ECO and WHD information gathering process.  

The Smart Export Guarantee

With the ending of the FiT scheme a new scheme was introduced called the Smart Export Guarantee (SEG).

With changes brought about by the rise of renewable electricity a new method of compensating electricity generators was needed.

The SEG pays homeowners and businesses who generate renewable electricity but don't use it. This scheme is seen as the natural step after the FiT scheme and one that government and industry hopes will prove more effective at helping achieve the UK's renewable energy goals.

The SEG came into force in January 2020.

For more information on the SEG read our post titled - What is the Smart Export Guarantee?

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