Concept’s quick guide to the Smart Export Guarantee
The Government’s Smart Export Guarantee (SEG) is a new scheme for homes and businesses generating their own small-scale renewable electricity.
We’ve put together a quick guide to help businesses learn more about the scheme.
What is the Smart Export Guarantee (SEG)?
The Smart Export Guarantee (SEG) is the Government’s successor to the Feed-in Tariff scheme (FiT), which closed in March 2019. SEG came into force in January 2020.
It applies to businesses and homes that generate solar power and other renewables on a small scale. Energy suppliers are legally obliged to pay these homes and businesses for the electricity they export to the grid.
What’s the difference between the Smart Export Guarantee and the Feed-in Tariff?
Under FiT, exporters received both an export tariff (for energy supplied to the grid) and a generation tariff (for all generated energy regardless of use). However, SEG only offers an export tariff.
Another important difference is that whereas FiT guaranteed exporters a fixed price determined by Government, energy suppliers are now free to set the price they offer to exporters (although it must be more than 0 pence).
SEG – the basics:
- Qualifying energy suppliers with more than 150,000 domestic customers are legally required to offer at least one tariff to any eligible exporter.
- Smaller energy suppliers have the option of supporting SEG but are not legally required to do so.
- The rate paid per kWh must be more than 0 pence.
- The tariff structure is not standardised and suppliers may offer more than one. For example, they could have a fixed rate tariff and a variable rate linked to time of generation based on half hourly metering.
- Exported power must be metered, with a meter capable of reporting exports on a half-hourly basis, and meters must also be registered for settlement – though the SEG design is flexible and does not necessarily require half-hourly readings.
What low carbon technologies are eligible for SEG payments?
Under SEG, small-scale electricity generators that install anaerobic digestion, hydro, micro-combined heat and power (with an electrical capacity of 50kW or less), onshore wind, and solar photovoltaic exporters with up to 5MW capacity can receive payment for the electricity they sell to the grid.
What if I’m already on the Feed-in Tariff scheme?
More than 800,000 customers signed up to the Feed-in Tariff scheme before it closed in March 2019. If you are one of them, you are not affected by the closure and can continue to receive FiTs payments. You are not obliged to switch to the SEG scheme.
Are the SEG rules likely to change?
The Government has said it will monitor how SEG is working during the first years of operation to assess whether meaningful and innovative tariffs and contracts are coming forward. If it considers that insufficient progress is being made, it will consult on reviewing the operation of SEG.
Is installing solar PV still worth it under SEG?
At the time of updating this guide (May 2020) SEG payments are 5.6p/kWh at best, whereas systems designed for as close to zero export as possible would achieve bill savings at, say, 13p/kWh.
On this basis, it may well be prudent to avoid SEG for new systems, aiming instead to size systems at the design stage to daytime building loads to maximise onsite usage of generated energy. In this way, solar PV can make an attractive investment, delivering savings on company energy bills, as well as protection against rising energy prices. It can also enhance your reputation, help you to meet sustainability targets and ensure compliance with Part L regulations.
How can Concept help?
If you are considering on-site generation, we can help you to assess the commercial opportunities specific to your business, including an analysis of the potential savings and return on investment. We provide independent advice on suppliers and technologies, and can manage the installation process and on-going monitoring. Our full service approach delivers a hassle-free project that generates maximum clean energy yields.
Get in touch if you’d like to learn more.