Feed-In Tariffs (FiTs)

Tariff-based incentives that result in favorable tariff payments to the entity providing electricity. The price is generally designed to promote investments in renewable energy, by guaranteeing investors a revenue stream that covers costs and a return on capital sufficient to motivate investment. The FiT can be uniform or differential across technologies for a fixed period of time (and can include escalator or de-escalator clauses).
The feed-in tariff purchase prices are usually based on the cost of renewable energy generation paired with considerations as to social cost, investor requirements and policy targets. With a FiT, any customer or entity is normally eligible to sell energy under the terms of the tariff