Shout It Loud

The Feed-in Tariff (FIT) is an motivator created to repay the production of renewable energy both by households and investors. Power companies are forced to pay back, at rates higher than the market, power originated from renewable sources; such as wind, thermal solar, PV solar, biomass, hydro and geothermal. This tariff goes also under the name of Feed-in Law, Solar Premium, Renewable Tariff or Renewable Energy Payments. FIT helps make the production of renewable energy economically viable. Usually governments assure the tariff for up to 15, 20 or even 25 years from the date of the installation.

The development of sources of renewable energy is considered important to avoiding climate change. Producing renewable energy still costs more than the cost of producing energy from fossil fuels. FIT tries to offset this difference, thus making more attractive renewable energy installations, by requiring the power grid to buy back and redistribute the energy generated by renewable installations. The difference in cost is spread over all of the customers of the power company. FIT requires net metering regulation to account for power purchased from the grid and energy sold to the grid.

FIT is seen as more effective than quotas enforced on power companies, because it satisfies the morality of people. What follows is a simplified outline of FIT policies by some European countries.