From 1 April 2010 a feed-in tariff - known as the Clean Energy Cashback will be paid to encourage installations of wind turbines, solar photovoltaic panels and micro hydro schemes of up to 5MW capacity. Its aim is to encourage the production of low carbon electricity.

The structure of the feed-in tariff will be:

•  A fixed payment from your electricity supplier for every kilowatt hour (kWh) your system generates. This is called the generation tariff. See below for rates.
• A guaranteed price for any surplus electricity that you do not use on site, and export to the grid. This is called the export tariff and will also be paid by your electricity supplier. It has been set at 3p per kWh indexed annually by the retail price index.
  
• In addition, any as you use electricity generated on site you will need less from the national grid – so your import bills will be lower.

The rates of generation tariff for the first two years of feed-in tariffs (April 2010 - March 2012) will be as follows. The rate will be indexed to the retail price index for the life of the tariff.

Hydro: 19.9p for installations up to 15kW; 17.8p for 15-100kW; 11p for 100kW-2MW; 4.5p for 2-5MW, paid for 20 years

Solar photovoltaic panels: 41.3p for installations of less than 4kW retrofitted onto an existing building (36.1p if it is on new build); 36.1p for 4-10kW; 31.4p for 10-100kW; 29.3p for 100kW-5MW and for stand alone systems, paid for 25 years.

Wind: 34.5p for installations with a capacity of less than 1.5kW; 26.7p for 1.5-15kW; 24.1p for 15-100kW; 18.8p for 100-500kW; 9.4p for 500kW-1.5MW; 4.5p for 1.5-5MW, paid for 20 years.

MicroCHP pilot: 10p per kW for micro combined heat and power installations. This will support up to 30,000 installations and will be reviewed when the 12,000th system has been installed. It will be paid for 10 years.

Existing microgenerators (under 50kW) who are currently accredited under the Renewables Obligation will automatically be transferred to the feed-in tariff and will be paid 9p per kWh, regardless of technology, until 31 March 2027.

Tax: In the 2009 Pre-Budget Report the Chancellor confirmed that household which use renewable technology to generate electricity mainly for their own use will not be subject to income tax on feed-in tariffs.

The tariff for new projects will reduce annually (“degress”) to reflect (and to some extent encourage) expected decreases in technology costs.

People who install any of the above systems before April 2010 are still be eligible for government grants such as the low carbon buildings programme (subject to funds lasting until then). You will automatically be transferred to the feed-in tariff once it comes in.

For frequently asked questions on the feed-in tariff, and to ask your own questions, see the blog Feed-in tariff: your questions answered.

Renewables Obligation Certificates are issued for each megawatt hour (MWh) of electricity generated. They are designed to incentivise big energy companies to invest in renewables, and in the past the red tape involved in claiming them often proved too much for small generators. In April 2007 the government changed the system to make it easier. Most of the electricity companies that will buy your excess supply will also act as your agent, claiming the ROCs on your behalf. Since April 2009 microgenerators will receive two ROCs per MWh.

• First you will need to get permission to connect to the grid from your local Distribution Network Operator, and will need to comply with their regulations. Your installer should be able to help you with this.
• You will need an inverter to transform the low voltage DC electricity you generate into 240v AC electricity that matches mains supply. This must meet the G83 (this link downloads a pdf to your computer) standard.
• You will need an Ofgem-approved total generation meter (this link downloads a pdf to your computer), which is installed at the inverter to measure the total amount of electricity you have generated.
• Depending on which power company you sell to, you may also need an export meter, to monitor the amount of electricity you export.

This will depend on who you sell it to, and will fluctuate with changing electricity prices. Check with your chosen power company for up to date price information.

As an illustration, in spring 2009, the going rate for ROCs is about 10p per kWh generated (you need to generate a minimum of 0.5MWh to claim). Most of the electricity companies were offering c.10p per kWh for electricity exported – this roughly equated to the cost of buying 1kWh.

As we write this (April 2009) two companies have offers which stand out:

• Good Energy pays 15p per kWh for all the electricity you generate, however much you export to the grid. This simplifies the system, and reduces costs, as there’s no need to have an export meter.
• Scottish and Southern Energy pays 26p per kWh of electricity exported.

Both these rates include the ROC.

To find the latest deals you can search for buy back tariffs on the Energy Saving Trust website.

From 1 April 2010 the Government will set a standard 'export tariff' rate as part of the new feed-in tariff system.

From the blog:

Feed-in tariffs: Your question answered

Feed-in tarrif explained in video

Feed-in tarrif scheme is shortsighted

Electricity meters about to get smarter

Selling the electricity you generate

Support for microgenerators increased this month