Feed-In Tariff

Consensus definition: Feed-in tariff is the premium paid by a utility to it’s consumers for excess power generated by the consumer’s alternative energy generation system. The premium rate may differ, depending on the source of power generation, installation type, size of project, or technology employed. The rates are typically designed to diminish over time to track technological advances and overall cost reductions. This is consistent with keeping the payment levels in line with actual generation costs over time. Feed-in tariffs are intended to encourage development and deployment of alternative energy generation systems.