UK Government Introduces New Policy for Renewable Energy Producers

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The government of the United Kingdom has announced their new energy policy, which is called Smart Export Guarantee. It is to replace FIT, which is designed to encourage uptake of a range of small-scale renewable and low-carbon electricity generation technologies. The new scheme has its critics who say that the UK government should encourage citizens to use renewable energy instead of withdrawing support from it, but others argue that the new policy is to support the UK’s economy.

Feed in Tariffs

Last year the UK government announced that the feed in tariffs (FIT) for small-scale renewables will end in 2019 and this caused many supporters of renewables to be alarmed. FIT officially closed in March, halting the payments of domestic and commercial green energy producers. The decision was widely criticized by the renewables industry, which has said that it will cost jobs and investment opportunities.

Since the creation of FIT in 2011, the scheme has facilitated vast growth in the solar industry in the UK, and many see it as one of the key drivers of the industry’s success. While it was uncertain what the government would do in response to the criticism, they have now introduced the Smart Export Guarantee.

Smart Export Guarantee

This new scheme is being promoted as a mechanism that pays people to produce small amounts of renewable energy and electricity they export to the grid. This applies to those installing a renewable energy generating system using technologies such as solar PV panels, domestic wind turbines, hydropower, anaerobic digestion, and micro combined heat and power.

After the end of the FIT scheme, the government recognized that they needed to provide small-scale renewable energy generators for the electricity the export to the grid. The Smart Export Guarantee (SEG) was introduced by the Department for Business, Energy, and Industrial Strategy (BEIS) and will be fully realized on the first day of 2020.

With SEG, all licensed energy suppliers with 150,000 or more customers have to provide at least one SEG tariff. The smallest suppliers can also offer a tariff if they wish to, and all suppliers can choose to offer means of payment for exported electricity.

Who is Eligible?

Those with Solar PV systems, onshore wind turbines, anaerobic digestion, and hydro up to 5MW and micro-combined heat and power, with an electrical capacity of up to 50kW available. Any typical domestic system would be well within these size limits. The technology used by householders must be certified under the Microgeneration Certification Scheme (MCS) or an equivalent.

According to the site MoneyPug, which is known as a platform to find energy comparison sites, energy suppliers may ask you for a MCS certificate to prove that the installation meets this standard. Power that is exported must be metered using a meter capable of reading exports on a half hourly basis. It doesn’t matter whether the half hourly readings are not required for the tariff. Meters must also be registered for settlement. In contrast to FIT, there will not be any requirements for properties to meet minimum energy efficiency standards.

FIT vs. SEG

While SEG doesn’t require properties to meet any energy efficiency standards, it is generally accepted that SEG is less generous. Homeowners are only paid for the energy they export back to the grid, not simply for producing renewable energy. Supporters of renewables argue that it doesn’t encourage the UK public to completely switch to green energy. With scientists everywhere warning about the harmful effects of fossil fuels and the need to transition to cleaner energy, SEG doesn’t facilitate this transition, nor the economic growth, as much as the FIT program. The government of the UK should encourage citizens to use renewable energy instead of eliminating their support for solar panels and other green energy sources that need to become the mainstay of the world’s energy production.

It is still possible to get subsidies for producing green energy, but you will need to produce more energy because people will only be paid for the power that export to the grid. This is not enough incentive to help people get into the green energy business, and with no other direction the government will likely regret their unwillingness to truly support the industry.

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