The Smart Export Guarantee
Customers installing solar panels on their homes will be able to sell excess energy back to the grid via their energy suppliers. Energy companies with more than 150,000 customers will be required to establish export tariffs and demonstrate to their customers how much money they will receive per unit of electricity exported back to the grid. Many suppliers already have export tariffs and many more are in the process of setting them up. Export tariffs won't come into force until 1 January 202o to allow energy suppliers adequate time to comply. The new rules announced this week will only apply to new installations of solar panels and other forms of renewable generation – if you already have Solar PV, this change won't impact you.
Why is SEG being introduced?
The original Feed In Tariff was thought to be too expensive to continue for new applicants, with the Government paying solar panel households for every kWh of energy generated. The Department for Business, Energy and Industrial Strategy wanted to replace the scheme due to a focus on marketplace competition rather than subsidies. It was confirmed December of 2018 that the Feed in Tariff would end in March 2019, meaning that no new subsidies would be available from that point. Meaning people having Solar PV installed from April 2019 would be exporting their excess energy back to the grid for free! Industry professionals were very critical of the move to end one form of export tariff without any plan for its replacement and the SEG has now been introduced.
The Solar Trade Association’s director of advocacy and new markets Léonie Greene said: “The net-zero energy transition we need cannot happen without the active engagement of the public so it is vital that, as very small players, they are treated fairly in a very big system. It is a requirement under EU law to offer fair, market-rate payment for small-scale solar power exports and government has decided to leave this to a market that it does not trust to supply power at a fair price.”
The Renewable Energy Association's chief executive Dr Nina Skorupska said: “Small scale renewable power deployment is good for businesses, good for homes, and good for our climate. The Government confirming that they will legislate for a Smart Export Guarantee is very positive and acknowledges innovation in the market, how the falling price of batteries and renewable energy can support lower bills, and how local generation and storage can reduce grid constraints.
Image source credit SolarWorld