UK homes to be guaranteed payment for solar energy

Homes and businesses that install new solar panels will be paid for supplying excess power to the energy grid under proposals announced by the UK government yesterday.

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The Smart Export Guarantee (SEG) will replace the existing Feed-in Tariff (FIT) scheme, with electricity suppliers paying new small-scale energy producers for their renewable energy.

This comes after fears were raised that households could be required to provide power to the grid for free after the FIT closes to new applicants on 31 March 2019.

It is hoped the SEG will create a whole new market, encouraging electricity suppliers to competitively bid for excess solar energy and to give producers the best possible price.

Energy minister Claire Perry said the new scheme would be a “win-win for consumers and the environment”, paving the way towards a “smart energy system of the future”.

“It could also reduce strain on energy networks, with a more decentralised and smarter local network delivering resilience more cost effectively, unlocking innovative products for electric vehicles and home energy storage,” she added.

The current FIT scheme assumes that small-scale energy providers export half of the electricity they produce, and pays out even when the power is not needed by the grid and falls below half of what is produced.

Some 560,000 households and businesses are currently generating electricity under the FIT through wind power, biomass, anaerobic digestion and hydro, although 99% comes from solar panels.

The SEG proposals were given a “cautious welcome” from the Solar Trade Association (STA), which praised the fact that providers would have to meet independent industry standards to qualify.

“However, our worry is that market barriers may impede the ability of suppliers to offer fair and meaningful rates, even though they may wish to,” STA CEO, Chris Hewett, said. 

“The devil really is in the detail. Customers are freely able to switch suppliers in a competitive market, so where these costs fall remains vital to developing meaningful offers.” 

A consultation into the new SEG scheme is now open and will close on 5 March.

 

Image credit | iStock
Author: 

Chris Seekings is a reporter for TRANSFORM

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