Solar households to be paid for excess power after Government U-turn
The UK Government has made a U-turn on its decision to end the solar "export tariff", confirming that households which install solar panels in the future will be paid for excess power they generate and send to the grid.
Officials from the Department for Business, Energy and Industrial Strategy (BEIS) last month said the Government would be ending the “export tariff” for solar panels under the feed-in tariff (FiT) scheme, which is closing in April.
The decision, which meant that people installing solar panels on their estate after April 2019 would not have been paid for sending excess power to the grid, sparked outrage from homeowners, green campaign groups and renewable industry bodies alike.
However, the UK Government has today (8 January) overturned its decision, promising to replace the FiT scheme with an updated framework.
Under the new scheme, which will be called the smart export guarantee (SEG) programme, households and businesses installing new solar panels will be guaranteed compensation for any power provided to the grid.
Solar-generated power put onto the grid through the scheme will be bid for by electricity suppliers - a clause BEIS claims will give exporters the best market price and greater control on how their power is brought and sold.
“This new scheme could help us to build a bridge to the smart energy system of the future, with consumers firmly at its heart – not only buying electricity but being guaranteed payments for excess electricity they can supply to the grid,” Energy Minister Claire Perry said.
“It could also reduce strain on energy networks with a more decentralised and smarter local network delivering resilience much more cost-effectively, unlocking innovative products for electric vehicles and home energy storage.”
Energy suppliers with more than 250,000 customers will be required to detail the amount they will pay domestic and business customers sending excess power to the grid under the SEG scheme, and launch SEG tariffs by the time the FiT scheme closes.
There is no floor price beyond companies having to pay more than 0p per unit of electricity exported – a caveat which has come as a disappointment to the Solar Trade Association (STA).
“We are very pleased the Government is unequivocal; small generators will be compensated for the power they contribute to the system, but the issue remains providing remuneration at a fair market rate,” STA chief executive Chris Hewitt said.
“Our worry is that the market barriers we have raised with Government may impede the ability of suppliers to offer fair and meaningful rates, even though they may wish to.”
Mind the gap
The exact details of the SEG scheme are yet to be announced, with BEIS having this week launched a public consultation to determine how best to support small-scale renewable generation in a way that stimulates innovations in the sector and provides value for customers.
The consultation, which is seeking responses from trade associations, energy aggregators, energy suppliers and the general public, closes on 31 March.
Once responses have been considered, parliament will need to debate and pass the legislation before the new scheme is launched.
With the FiT scheme closing on 1 April, there will, therefore, be an unspecified period during which no legislation for recompensating small-scale solar generators will be in place – meaning they will be providing power to the grid for free.
Nonetheless, the Renewable Energy Association (REA) welcomed the proposals, claiming they could help “usher in a new era for small-scale renewables”.
“It was clear that no-one should be asked to give away electricity for free, so we strongly advocated for a market-based solution and are pleased this approach has been adopted,” the REA’s director of policy and external affairs James Court said.
“Whilst the details around the transition from the former subsidy scheme will be important, this signal of support for the sector from Government will help our members continue to provide smarter, cleaner and cheaper electricity in the decade to come.”
The changes will not affect the 800,000-plus homes that have already fitted solar panels since the feed-in tariff scheme launched in 2010.