Feed-in Tariffs

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A feed-in tariff (FIT, FiT, standard offer contract, advanced renewable tariff, or renewable energy payments) is a policy mechanism designed to accelerate investments in renewable energy technologies by offering long-term revenues for renewable energy producers. Renewable energy producers get a defined feed-in tariff over a fixed time period, which is often about 20 years. This provides price certainty over a long period, thus helping to finance renewable energy investments. Typically, FITs award different prices to different sources of renewable energy in order to encourage the development of one technology over another. For example, technologies such as wind power and solar PV are awarded a higher price per kWh than tidal power. FITs often include a "degression": a gradual decrease of the price or tariff in order to follow and encourage technological cost reductions. Details on Feed-in tariffs in the Renewable Energy Sources Act: Feed-in tariff; (Source of the definition above: Feed-in tariff)