About Feed-in Tariffs

The world's best renewable energy law!

A Feed-in Tariff (or FIT) is a government legislated policy. It guarantees a fixed premium price over the retail rate, payable to any person or organisation who generates renewable electricity and feeds (sells) it into the national grid or local electricity network.

If implemented in New Zealand, a FIT would pay consumers to produce electricity, rather than simply charging them to use it. By placing a legal obligation on power companies to buy renewable electricity from New Zealanders at a premium rate, renewable energy systems such as solar photovoltaic, small wind and hydro become a worthwhile and secure investment for the many.

Feed-in Tariffs (FITs) give all New Zealanders the chance to profit economically, environmentally and socially from producing, using and selling renewable electricity.

Learn more about FIT benefits | Support FITs

Why do we need FITs?

It is widely recognised by those in the industry that New Zealand is about 15 years behind other OECD countries when it comes to smaller scale, renewable Distributed Generation (DG) like solar PV, small wind and hydro systems. In fact, we are one of the few countries in the world where renewable energy is declining! This trend is worrying when you consider the NZ Energy Strategy to 2050 has a target of 90% electricity being generated from renewables by 2025.

Current industry legislation, regulation and infrastructure is designed for a centralised generation regime, which means electricity consumers have very little control over their electricity, whether purchasing or selling.

A recent Commerce Commission report on exploitation of market power in the New Zealand electricity market (by Stanford University professor and California power market regulator, Fred Wolak) found evidence of market power being used by electricity market players in such a way that electricity prices on the wholesale market are being manipulated unfairly. This directly translates to increasing electricity prices, under investment in infrastructure and influence over decisions being made that are not always in the best interests of all New Zealanders.

New Zealand is also unusual in that, unlike many OECD countries, we have no specific Renewable Energy Policy (REP) to increase the uptake of small-scale renewable energy production. We could easily be 100% renewable much sooner than 2025 if the electricity market was truly competitive for all stakeholders, which includes small-scale generators.

Learn more about FIT opposition | Who are the industry stakeholders? (47KB)

Who pays the cost of FITs?

The cost is shared by all electricity users. Power companies pay out the FIT premium payments, which they pass onto their customers as a small increase in their electricity bill.

But unlike the painful power price increases we are used to, every New Zealander can profit econimically, environmentally and socially from this small price increase.

Learn more about how FITs are funded

FITs working around the world

FITs are already working successfully in over 45 OECD countries, states and provinces around the world! These countries recognise the benefits for having a distributed generation Renewable Energy Policy (REP), where consumers get paid for feeding power into the national grid or local electricity network from renewable sources.

Learn more about FITs worldwide | View rate of return examples

Where can I find further information?

As FITs are already working successfully in over 45 OECD countries, states and provinces worldwide, there's plenty of great FIT resources to refer to.

Refer to our Useful FIT Resources | Read the Latest FIT News

How can I show my support for FITs?

The New Zealand Government will only introduce FITs if the power of the people demand it. There's many ways you can help to make this happen:

Learn more about how you can support FITs

About FITs