Power Purchase Agreements (PPA's) vs the Export FIT Rate

For the first time since the Feed in Tariff (FIT) scheme began the rates being offered for PPA's are less than the current export FIT rate. Rates being offered are around 4.2p per kWh whereas the export FIT rate is 4.85p per kWh.

Generators are entitled to receive the export FIT or they can opt out of this fixed price and try to negotiate a better rate with an electricity purchaser via a PPA. A generator has the opportunity each year to decide whether to accept the FIT price or to opt out.

To date most generators have negotiated a PPA as the rate has been higher than the export FIT. However, as rates have now dropped, generators may wish to consider the export FIT option.

Generally, only the larger energy companies are licensed to pay the export FITrate and it can take some weeks for registration to take place. In addition, it is necessary to notify the PPA provider or a contract may be renewed if notice is not given in time.

If you are thinking of transferring from a PPA to a FIT licensee for the export FITrate at the end of your current contract we, therefore, recommend that you:

  1. Contact your current PPA supplier to confirm the latest date you can give notice for your current contract & ensure that you give notice before that date (NB. suppliers do send out reminder letters but letters can go astray and it is wise to make a separate diary note or you could find yourself tied into a new 12 month contract with a rate lower than the FIT).

  2. Contact a Registered FIT Licensed Supplier to register for the export FIT rate and ensure that you give yourself sufficient time to do so. The licensee will be able to give guidance on registration time frames.

We are providing this guidance to assist our valued customers based on our own experience. However, we would always recommend that you take appropriate advice before signing any contract. Our experienced team are always on hand for support and can be contacted on 01782 828720 or through our contact page.