Quick answer
A feed-in tariff defines renewable-electricity payment eligibility, quantities and rates under a specific scheme or agreement, which may cover generation or export and may include indexation.
Answer: A feed-in tariff is a renewable-electricity payment arrangement with eligibility, metering and rates defined by the relevant scheme or contract. Some programs pay for generation as well as export; others use the term for export compensation alone. Rates can be fixed, indexed or revised for new entrants. Check the jurisdiction, commissioning date and payment basis before estimating revenue—FiT does not mean a universal price or guaranteed project return.
Identify the scheme before using the label
The name can refer to different arrangements across markets. Record the authority or supplier, current rules, technology, capacity band, application/accreditation dates and term. A program closed to new installations can continue paying existing participants. A supplier export offer is not necessarily a long-term government support scheme.
Separate fixed or indexed rates for existing participants from degression of rates available to new entrants. A feed-in premium paid alongside market revenue is structurally different from a single administered payment rate. An auction is an allocation process, not proof of one universal tariff structure.
Generation and export payments are not interchangeable
| Payment basis | Quantity to verify |
|---|---|
| Generation | Eligible electricity produced at the specified meter |
| Metered export | Eligible electricity actually delivered to the grid |
| Deemed export | Export quantity estimated under the scheme’s specified rule |
| Market price plus premium | Eligible settlement energy and separate market/premium conditions |
Great Britain example, checked September 30, 2026: Ofgem’s FIT payment guidance states that the scheme closed to new applications from April 1, 2019. Existing payment categories and, where eligible, deemed export remain relevant. Ofgem publishes tariff bands and indexation information. A statement that every FiT pays only exported electricity at an unchanging rate would therefore be incorrect. Do not use this historical scheme’s conditions as a tariff for a new installation elsewhere.
FiT versus other commercial arrangements
Net metering concerns billing treatment of generation/export and imports, with settlement rules varying by jurisdiction; it is not always unlimited retail-rate credit. A PPA is a purchase contract whose terms may use different pricing and obligations. A green tariff concerns an electricity purchasing arrangement and need not compensate an on-site generator.
Compare the actual cash-flow and meter rules instead of relying solely on the name. Grid connection approval, tariff eligibility and financing acceptance are separate questions.
Checked export-based revenue example
Hypothetical inputs: annual generated energy 9,500 kWh, on-site use 3,200 kWh and eligible export 6,300 kWh, with no storage or additional loss boundary in this simplified balance. Assume export payment €0.081/kWh and avoided marginal import value €0.35/kWh. These rates are illustrative, not a current Germany offer.
- Export payment:
6,300 × €0.081 = €510.30. - Avoided import value:
3,200 × €0.35 = €1,120.00. - Combined modeled annual benefit: €1,630.30, before other costs and taxes.
The same kWh cannot count as both self-consumed and exported in this example. Fixed bill charges may remain, and applicable tariff structures can change the avoided marginal value.
Lifetime calculations: avoid double degradation
For an export-based contract, sum eligible export_n × applicable rate_n over the term. If each year’s export already incorporates degradation and load timing, do not apply another degradation factor.
A simplified scenario with constant export fraction can start from year-one export and use export_n = export_1 × (1 − d)^(n − 1). Actual export need not fall proportionally with generation when consumption, storage or control conditions change. Generation-payment and deemed-export schemes require their own quantity rules.
Project review checklist
Confirm eligibility, capacity tiers, qualifying date, connection/metering requirements, payment schedule, indexation, curtailment treatment, transfer and tax conditions. Verify current official documents before a proposal. Do not invent urgency from an unconfirmed degression deadline or imply a tariff removes counterparty and production risk.
Design comparisons should include timing, export constraints, capital costs and applicable rates. A low export rate does not by itself establish that storage is profitable, and a high rate does not justify every additional module.
Common questions
Does every FiT pay only exports?
No. Check whether the scheme has generation, metered-export or deemed-export payments.
Are FiT rates always fixed forever?
No. The term, indexation and eligibility rules depend on the arrangement.
Is the Great Britain FIT open to new applications?
Ofgem states that it closed from April 1, 2019; verify the appropriate current export arrangement separately.
Does FiT eligibility guarantee a profitable project?
No. Output, costs, financing, tax and other risks still matter.
Related Glossary Terms
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Co-Founder · SurgePV
Akash Hirpara is identified by SurgePV as a company co-founder. His SurgePV author page lists only role information that can be tied to the public profile below; education, certifications, project totals, financial results, speaking engagements, and media appearances are not asserted without retained evidence.
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