The Feed-in Tariff (FIT) scheme has entered its 12th year. The scheme was set up to provide financial incentives to install renewable power generation.
Most of us will recognise its contribution to domestic solar panel installations over the last decade. But it also caters for wind, hydro and small-scale CHP. April marks the start of the new Feed-in Tariff year. The 13 mandatory and 20 voluntary FIT licensees for 2021-2022 are named on Ofgem’s website. That’s exactly half the number of licensees involved in Year 6 of the scheme. Whilst that reduces Ofgem’s paperwork in administering the scheme, there’s still plenty to do tie up the loose ends on the year just passed.
Everyone Pays Their Share
Levelisation shares the total cost of the FIT Scheme between electricity suppliers. And because Feed-in Tariff is paid for by energy consumers, ALL suppliers – not just FIT licensees – must take part.
It’s a process that takes place quarterly. This ensures that suppliers with a relatively high number of FIT installations on their books are not left out of pocket for too long.
On top of that is the annual round of levelisation. This allows for two things: a reconciliation of quarterly payments, and performance assurance in the form of independent audit.
What suppliers owe to the scheme is based on the amount of electricity they supplied in the year, so that’s the key number Ofgem needs.
Suppliers that are also a FIT Licensee submit a bit more information on top. For example, they’ll report payments that they have made to generators as part of the scheme.
This information must be with Ofgem by 1st August.
Ofgem then does the sums, and at the start of September will inform suppliers whether they owe or are owed money. Bills must be settled within 20 days so that by October monies can be passed from those who have under-contributed to those who’ve paid more than their share.
There’s a lengthy guidance document available which steps through this process.
The Audit Window Is Now Open
Ofgem also seeks assurance that the figures reported into annual levelisation are robust. That means that for Feed-in Tariff licensees, independent audit of submitted data is a requirement.
Last year’s FIT Licensees will be provided with the requirements of the audit by the end of May. An auditor will use this to assess the records kept and submitted by the FIT licensee.
Turnaround on these audits can be tight but the good news is that with preparation they can be pretty painless. Engage Consulting carries out several FIT audits every year. With the audit period for FIT year 11 approaching, we would be very happy to share details of our service and availability with you.
If you would like to know more, please contact us or look us up Linkedin.