Feed-in Tariffs (FITs) Pay you for producing extra solar energy.

Put simple, a feed-in tariff is an incentive for you to produce more solar energy than you need. For example: you install solar panels on your home, but sometimes (like when you’re gone during the day) the system produces more energy than you use. Since most home solar arrays are grid-tied in the United States (they have no battery storage systems), this excess energy is sent back into the grid. Your utility meter should spin backwards, and the feed-in tariff stipulates that you should get paid for this extra energy production.

Feed-in Tariffs are great, since the provide a real incentive to produce the most solar power possible. Without FITs, any extra energy you produce is essentially wasted, in the sense that you’re giving your utility some free lunch.

In some places, feed-in tariffs have massively increased the rate of adoption of solar power. For example, Germany–which is number 1 in solar energy production by the way–introduced in the year 2000 their Renewable Energy Sources act, which has proven to be an extremely effective policy for advancing all kinds of renewable energy development. Germany’s feed-in tariff basically set the benchmark for renewable energy policy on the topic.

The best way to find out if a feed-in tariff is available in your area (they are locally determined in the United States – there is no Federal feed-in tariff) is to contact a local solar installer. Local installation companies are experts in the financials and policy of your state, city, and municipality and they can help you figure out the details. You can get a free online solar estimate here or sign up to have a solar installer contact you.