There are three potential sources of income from small-scale renewable energy generation:
- export tariffs
- feed-in tariffs paid by the government for every kilowatt of electricity generated
- green energy certificates
If you generate more electricity than you use you can sell the extra electricity back to your electricity company. The payments you receive for selling electricity are called export tariffs.
Feed-in tariffs for low carbon electricity
Feed-in tariffs provide financial support for low carbon electricity generation in projects up to five megawatts. The government guarantees payment to microgenerators for every kilowatt hour of electricity you generate by renewables, including electricity you generate and use yourself.
The money you get from a feed-in tariff is in addition to any export tariff payments you may receive from electricity companies. The feed-in tariff scheme is also sometimes called clean energy cash back. The size of the payment you receive per kilowatt hour and length of the scheme depends on the type of renewable energy you generate.
You could get money from the scheme if you have:
- wind turbines
- solar photovoltaic cells
- a hydroelectric plant
- an anaerobic digestion plant
- a micro-combined heat pump
The government regulator Ofgem regulates the feed-in tariff scheme. Read about the feed-in tariff scheme on the Ofgem website.
Green energy certificates
If you operate a small-scale energy generator you may be able to make money by selling green energy certificates to energy suppliers.
You can save money by using the certificates to get exemptions from some environmental taxes, such as the climate change levy.
The certificates include:
- renewable obligation certificates
- levy exemption certificates
- renewable energy guarantee of origin
See our guide on how to pay Climate Change Levy.
A range of grants and loans are available to help businesses switch to renewable energy.
If you are a small or medium-sized business you can apply for an interest-free loan from the Carbon Trust to invest in renewable energy technology. They can also help you with installation. Find information about business loans on the Carbon Trust website.
Search our business support finder for grants, loans, expertise and advice for which your business may be eligible.
Enhanced Capital Allowance scheme
If you invest in certain renewable energy equipment you may qualify for tax breaks called enhanced capital allowances. See our guide on first-year allowances for energy saving products.
CRC Energy Efficiency Scheme
If your business is covered by the CRC Energy Efficiency Scheme (formerly the Carbon Reduction Commitment) you can claim credits for any electricity you generate. This means you can buy fewer allowances and save money.
See our guide on how to meet EU Emissions Trading System requirements.