Weighing up installing solar panels? Or looking for the best way to benefit from your new PV solar panel system?
The government are currently confirming details of the Smart Export Guarantee – a system to help you get financial reward for exporting renewable energy to the national grid. This is on top of the savings you’ll make on your energy bill by generating your own electricity. It’s due to come into force from 1st January 2020.
What’s the Smart Export Guarantee?
The Smart Export Guarantee (SEG) is a system proposed by the government to help UK homeowners benefit financially from their solar panels. The idea is to provide an incentive for small-scale solar PV and other renewable electricity generators to export their spare electricity to the national grid.
Under the scheme, all licenced energy suppliers (those with 150,000+ customers) will have to provide at least one Smart Export Guarantee tariff. That means they’ll have to pay renewable energy generators for every kWh of electricity they export to the grid. Smaller energy companies will be able to opt-in to the scheme too, if they want to.
What about the Feed-in Tariff scheme?
One of the main reasons the Smart Export Guarantee has been proposed is to provide a replacement incentive for homeowners to install and use solar panels and other renewable technology. This is instead of the Feed-in Tariff scheme (FITs), which ended on 31st March 2019.
If you have a solar panel installation that was registered before April 2019, you’re still eligible to benefit from FITs, as long as you apply to the scheme before 31st March 2020. It’s the best way to financially benefit from your solar panels, as you get money for generating and exporting electricity.
But if you’ve got a system that didn’t have its MCS certificate issued by 31st March 2019, or are thinking about installing solar PV in the future, the SEG is the best way for you to benefit from your panels.
How can I make sure I’m eligible for the Smart Export Guarantee?
Similar to FITs, your solar panel system and the installer you choose must be certified under the Microgeneration Certification Scheme (MCS) or equivalent. When you apply for an SEG tariff from your energy supplier, they may ask you to provide an MCS certificate to prove that your system is up to standard.
You’ve also got to have a meter that is capable of reading exports on a half-hourly basis – even if they’re not required for the tariff. The meter must also be registered for settlement.
But, unlike FITs, you won’t have to prove that your property meets minimum energy efficiency standards. Good news if you couldn’t get a valid EPC certificate before!
How much can I make from exporting my electricity with the Smart Export Guarantee?
At the moment there’s no minimum tariff for the SEG – only that it’s above zero at all times. However, it’s hoped that energy companies will end up introducing a range of tariffs according to the time of day electricity is exported and how much.
At first, SEG tariffs will probably be quite straightforward with energy companies paying a fixed rate per kWh of electricity exported. But they may get more complicated over time, and Ofgem will report on all the tariffs available and how many households are on them.
But can we guess how much we might be able to earn from solar panels? We can look to the export tariff in the final quarter of the Feed-in Tariff, which was 5.38p/kWh. You can also see what suppliers are already providing – for example, the energy supplier Octopus offers two different export tariffs for renewable energy generators already, and pays 5.5p/kWh on their fixed-rate tariff. EON and Bulb also have export tariffs available.
What about other grants or financial support?
You can combine the SEG with other grants you may have received for installing solar panels. The only exception is if you already get payments from the Feed-in Tariff scheme – these last for 20 or 25 years from your installation, depending on when you got solar panels.
However, you can choose to opt-out of your Feed-in Tariff and receive SEG payments instead, so it’s worth keeping an eye on what suppliers start to pay in case it overtakes your FITs payments.
If you’re eligible for other financial support, such as the Home Energy Scotland loan offered by the Energy Saving Trust, you can combine the two together. That means you can maximise your savings and the financial impact that your solar panel system could have.
What if I have a solar battery?
These days, lots of people are getting a battery storage system installed alongside their solar panels. Your battery could store electricity imported from the grid, known as brown electricity, then export it later on.
Energy suppliers don’t have to pay you for brown electricity exported from the grid – but they might choose to do so.
Some suppliers may only pay the SEG for the green electricity – the electricity your solar panels generate themselves – and not the brown electricity. They may ask you to show how you separate the green electricity and brown electricity – so ask your installer about how to do this before you go ahead with them.
So, although the Feed-in Tariff has been discontinued, the Smart Export Guarantee and the already-available export tariffs show that there’s still money to be made from solar PV. Of course, this is on top of the savings you’ll make on your energy bills by generating your own electricity!
A recap of the benefits of solar panels
Even without the SEG, solar panels are still a great way to save money and do your bit for the environment. Here’s a quick reminder of the advantages of solar panels:
- Generate your own FREE electricity
- Save money on your electricity bills since there’s no need to buy from the grid
- Reduce your carbon footprint by generating clean electricity from daylight
- Enjoy low-maintenance energy
- Store up electricity to use in the evenings with a solar battery system
- Increase the value of your property
- Charge your electric car from home
If you want to know whether it’s possible to install solar panels on your property or are looking for quotes, we can help. Fill in our online form and we’ll connect you with up to 4 MCS-registered solar companies in your local area.
This article was originally published on 24th April 2019 by Evy Coe.
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