Feed-in tariffs are agreements that guarantee electricity producers fixed prices for the electricity they feed into the grid. They are offered by national governments as inducements to promote investments in certain forms of electricity production – most typically to encourage the use of renewable energy sources or locally available fuels as alternatives to imported fossil fuels. Many EU member states already offer feed-in tariffs for wind power and certain other forms of renewable energy. The prices and coverage of the various national tariff schemes vary considerably.
Feed-in tariff scheme
In Finland, the feed-in tariff scheme was put into operation in 2011. It is financed from funds within the state budget. In the 2012 budget, almost 100 million euros was approved for production subsidies under the feel-in tariff scheme.
Through the feed-in tariff scheme, electricity producers receive support for a period of twelve years. This support covers the difference between the actual production costs of electricity and the market price of the energy source in question, or the costs of alternative fuel.
Source: Ministry of employment and the economy 11/2011