Renewables Obligation (RO) is the main policy in place introduced by the government to support renewable electricity projects in the UK. It is designed to encourage licensed electricity suppliers to source a fraction of their electricity from a renewable source. Upon meeting the obligation, energy suppliers must present a Renewables Obligation Certificate (ROC).
ROCs are green certificates issued by the Authority indicating that the supplier has generated the required amount of renewable energy. However if the Supplier cannot provide sufficient ROCs to cover their obligation, they would have to pay a penalty into a ‘buy-out fund’. This fund is then split between the energy suppliers who have provided evidence of sufficient ROCs.
Feed-in-Tariff (FITs) is an environmental programme introduced by the government to encourage the uptake of small scale renewable and low carbon electricity generation technologies. Therefore consumers who generate their own electricity either with solar panel, wind turbines, hydroelectricity, micro combined heat and power (CHP) and many more will receive a monetary reward from your energy supplier.
Although the objective of RO and FITs is to enable the usage of renewable energy, the two schemes are different in their approach. RO applies to large scale renewables generation such as landfill, hydro power and wind farms, whereas FITs are targeted towards consumers and aimed at encouraging them to be more energy efficient, by producing a proportion of their own energy.