Feed-in Tariffs

A feed-in tariff (FIT) is a policy mechanism that pays solar system owners a set rate for the electricity they feed back into the utility grid. Unlike net metering (which provides credits against your electricity consumption), a feed-in tariff pays you directly for every kilowatt-hour your system exports, often at a premium rate designed to encourage renewable energy adoption.

Feed-in tariffs were instrumental in driving early solar adoption in countries like Germany and Japan. In the United States, FIT programs are less common than net metering but do exist in some states and municipalities. The payment rate is typically fixed by contract for a set period (10–25 years), giving solar owners predictable income. Some FIT programs purchase all electricity the system generates, while others only purchase excess power not consumed on-site. The rates vary widely — from a few cents per kWh to rates that exceed retail electricity prices. As solar costs have dropped and net metering has become widespread, many US FIT programs have been phased out or reduced. However, feed-in tariffs remain an important policy tool in some markets, particularly for community solar and small commercial installations.