Energy saving in energy market reform-The feed-in tariffs option

► The concept of an energy saving feed-in tariff (ESFIT) is introduced and analysed. ► ESFITs are potentially an alternative to supplier energy efficiency obligations. ► To maximise effectiveness, ESFITs should be paid as capital grants. ► ESFITs are justifiable if there are premium prices for low carbon generation. ► Higher rates of ESFIT may be justified to overcome barriers to energy efficiency.