The Feed-in Tariff (FIT) scheme: an expert guide
Karl Wallis
Why you can trust our content • Independently researched: Every statistic is drawn from Ofgem, DESNZ or peer-reviewed industry surveys. • Experience counts: 1,200+ solar landing pages delivered, >£60 million in validated pipeline generated. • Transparent motives: We install domestic solar systems nationwide - but we never recommend a product that fails our own engineering and payback tests. • Regulatory alignment: All guidance reflects UK regulations current as of 8 May 2025.
At a glance
• Fit flashback: From 2010 to 2019, the government paid households two separate tariffs - one for every kWh generated and another for each kWh exported back to the grid.
• Scheme sunset: New applications closed on 1 April 2019. Existing installations still receive indexed payments until 2030-2039, depending on their start date.
• Modern alternative: The Smart Export Guarantee (SEG) replaced FIT in 2020, with export rates now as high as 30.69 p/kWh in peak windows.
• Bigger picture: Coupling panels with battery storage slashes grid imports by 70 % and can push whole‑system payback below six years.
• Next step: Answer six quick questions to discover your personalised export tariff and installation quote.
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What's in this guide?
1. What was the Feed-in Tariff scheme?
2. How the Fit paid households - generation tariff vs export tariff
3. Why did the government close Fit
4. Payments after closure - do you still get paid?
5. Real-world Fit earnings: case studies
6. Fit vs SEG: Which tariff wins in 2025?
7. Are SEG export rates high enough to justify new solar installations?
8. How to secure the best SEG rate
9. Battery storage & EV chargers: super‑charging your savings
10. FAQ
11. Next steps & quick quote
1. What was the Feed-in Tariff scheme?
The Feed-in Tariff scheme - usually shortened to FIT or "feed-in tariff" - was a government incentive launched in April 2010. The goal was simple: kick-start small-scale renewable electricity generation by guaranteeing tariff payments far above the market price of power.
Every eligible household that installed certified solar PV could lock‑in two FIT rates for up to 25 years (later reduced to 20 years):
1. Generation tariff - a set number of pence per kWh for every unit of electricity your panels generate, whether you use it or not.
2. Export tariff - an extra payment for each kWh you didn't use and "fed" into the grid.
Combined, these tariffs routinely delivered double-digit returns - a compelling proposition when bank interest sat below 1 %. Little wonder that over 850,000 domestic installations signed up between 2010 and 2019.
2. How the Fit paid households - generation tariff vs export tariff
Under Fit, meter readings were submitted quarterly (or automatically via a smart meter), triggering payments directly to your bank. Early adopters enjoyed generation tariffs as high as 43.3 p/kWh and export tariffs of 3 p/kWh - a 10 kw roof could earn north of £1,500 a year in 2011 money.
The numbers that mattered
Year of installation, Generation tariff*, Export tariff, Indexed until, Typical domestic system size, First‑year income
2010-11 43.3 p/kWh 3.0 p/kWh. 2035-36 4 kW £1,640
2014 14.9 p/kWh 4.6 p/kWh. 2034 4 kW £700
2018-19 3.93 p/kWh 5.03 p/kWh 2038-39 4 kW £220
*Generation rates varied by installation size, energy efficiency band and the quarterly degradation schedule.
While later cohorts secured lower tariffs, falling panel prices meant many households still saw double-digit returns. Crucially, both the generation and export components were index-linked to the Retail Price Index (RPI), so incomes have tracked inflation.
3. Why did the government close Fit
Fit was always designed to be temporary. As costs for modules and inverters dropped more than 80 %, the Treasury decided subsidies had done their job. On 1 April 2019, the scheme shut to new applicants. The closure was announced 18 months earlier, giving installers and would-be solar owners time to act.
Key reasons cited by the government included:
• Cost control: Annual Fit payments had exceeded £1.5 billion, funded via electricity bills.
• Market maturity: Panel costs hit parity with the support level, making subsidies less critical.
• Policy shift: Incentives moved from generation to carbon-saving measures such as Heat Pump Grants and the ECO4 retrofit programme
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4. Payments after closure - do you still get paid?
Yes. If your system was commissioned and registered before the deadline, you'll keep receiving both tariffs at the agreed rate plus RPI uplift for the remainder of your 20-year term. Your Fit licensee (often your original energy supplier) must honour that contract.
Pro tip: If you've moved house, update your Fit account details immediately; missed readings can delay payment cycles.
5. Real-world Fit earnings: case studies
"Our 2012‑installed 3.92 kw array has generated 38,500 kWh so far. We've earned £7,900 in generation payments and £1,400 in deemed exports. The system paid itself off in seven years."
- Natalie Hamilton, Chartered Energy Engineer
Ofgem's latest public data shows the average pre-2012 Fit household is still receiving around £600 per year - effectively a 10 % return on the original outlay.
6. Fit vs SEG: Which tariff wins in 2025?
When Fit closed, critics worried new solar owners would have no route to monetise spare electricity. Enter the Smart Export Guarantee - or SEG. Since January 2020, licensed suppliers with 150,000+ customers must offer at least one SEG export tariff.
Top 2025 SEG export rates
Supplier & tariff (May 2025) Export rate Tariff type Customer‑only?
Octopus Intelligent Octopus Flux 30.69 p/kWh (4‑7 pm) Dynamic Yes
E.ON Next Export Exclusive 16.5 p/kWh fixed Fixed Yes*
British Gas Export & Earn Plus 15.1 p/kWh fixed Fixed Yes
Good Energy Solar Savings 15 p/kWh fixed Fixed Yes
Weighted SEG average 8.2 p/kWh
*Or install your solar through E.ON.
Snap comparison: Fit vs SEG
Top 2025 SEG export rates
Supplier & tariff (May 2025) Export rate Tariff type Customer‑only?
Octopus Intelligent Octopus Flux 30.69 p/kWh (4‑7 pm) Dynamic Yes
E.ON Next Export Exclusive 16.5 p/kWh fixed Fixed Yes*
British Gas Export & Earn Plus 15.1 p/kWh fixed Fixed Yes
Good Energy Solar Savings 15 p/kWh fixed Fixed Yes
Weighted SEG average 8.2 p/kWh
*Or install your solar through E.ON.
Snap comparison: Fit vs SEG
Ready to Power Your Future with Solar?
Join hundreds of UK homeowners and businesses already saving with GRW Solar.
Enjoy cleaner energy, lower bills, and expert support every step of the way.
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Email:
enquires@grwsolar.co.uk
Visit grwsolar.co.uk to get your free quote today
It takes two minutes to see how a 4 kw system and the best SEG tariff could save your household £900+ a year. Tap "Start my solar quote" at the top of this page. (No obligation, no sales spam - just numbers.)
7. Are SEG export rates high enough to justify new solar installations?
Let's crunch a realistic scenario:
• Location: Manchester
• System size: 4 kw
• Annual generation: 3,700 kWh
• On-site usage: 55 % (with a 5 kWh battery)
• Exported electricity: 1,665 kWh
• SEG tariff: 16.5 p/kWh fixed
• Import tariff: 28.5 p/kWh variable
Annual benefit
• Grid savings: 2,035 kWh × 28.5 p = £580
• Export income: 1,665 kWh × 16.5 p = £275
Total: £855 per year. With current turnkey install prices around £5,700, the simple payback is under seven years, faster if energy prices creep upward. Add a smart EV charger and time‑of‑use import tariff, and the ROI accelerates.
8. How to secure the best SEG rate
1. Verify eligibility: MCS-certified installation, smart meter capable of half-hourly export readings.
2. Audit your battery strategy: Some dynamic SEG tariffs penalise battery "looping" (charging from the grid then exporting). Choose a policy-compliant smart battery.
3. Compare suppliers quarterly: SEG contracts are refreshingly switch-friendly. Use your most recent kWh export statement to model savings.
4. Submit readings on time: Missed or erroneous figures delay payments. Automate via Data Communications Company (DCC)‑linked meters, where possible.
9. Battery storage & EV chargers: super‑charging your savings
Pairing panels with a battery smooths the mismatch between daytime generation and evening demand. The average UK household now pulls 43 % of its usage in the 4-11 pm window, precisely when SEG peak rates can spike above 30 p/kWh. Store the sun, then export at tea‑time demand peaks.
Smart EV chargers layer on another benefit: fill your car at an ultra-cheap overnight import rate (as low as 7 p/kWh on Octopus's Intelligent tariff) and reserve your battery for premium export windows. Some tariff structures even pay you to absorb grid excess during windy nights before rewarding you for pushing power back the next day.
10. Frequently asked questions
Does Fit income count as taxable?
For most domestic-scale systems under 50 kW, FIT and SEG payments are exempt from income tax under the Microgeneration Certification Scheme rules, provided you live in the property.
Can I leave Fit for SEG?
In theory, yes - but you'll sacrifice the valuable generation component. Almost no one switches unless their FIT export rate is below 3 p/kWh and they can secure a market-beating SEG tariff.
What happens after my 20-year Fit term ends?
Your panels will keep producing electricity for 35+ years. At that point, you can register for a standard SEG rate.
Is the SEG guaranteed by the government?
Suppliers are obligated to offer at least one tariff, but the rate itself is market-driven.
How often do SEG rates change?
Fixed tariffs are locked for 12 months. Dynamic rates can vary half-hourly.
Do I still need an EPC for SEG?
Yes. Properties rated below band D may face limited tariff choices.
Can I install a bigger system than Fit allowed?
SEG has no size cap, but domestic grid connections over 16 A per phase need DNO approval.
Will battery degradation eat into my export income?
Modern lithium‑iron‑phosphate packs carry 6,000+ cycle warranties - typically 15 years. Financial modelling already prices this in; the savings override wear‑and‑tear costs for most households.
11. Next steps & quick quote
You're now Fit‑and‑SEG fluent. The final step is personal: learn exactly how much power your roof can generate, which export tariff suits your habits, and what turnkey installation would cost.
Ready to Power Your Future with Solar?
Join hundreds of UK homeowners and businesses already saving with GRW Solar.
Enjoy cleaner energy, lower bills, and expert support every step of the way.
Call us free on 0800 059 0606
Email:
enquires@grwsolar.co.uk
Visit grwsolar.co.uk to get your free quote today
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