New rules will give payments to households installing solar panels

The Government has announced new rules – known as the smart export guarantee (SEG) – that places a legal obligation on all energy suppliers with more than 150,000 customers to introduce ‘export tariffs’ for households with solar panels by the beginning of next year.

These export tariffs will pay households and businesses that install small-scale solar, wind or other renewable energy technology for each unit of electricity they sell back to the grid.

The new rules will replace the old feed-in tariff (FIT) scheme, which closed to new applicants on 31 March 2019. However, unlike the FIT scheme, which paid households for all electricity they generated and exported, the new SEG rules will only provide payments for the electricity you export.

Under the new rules, payments won’t start until 1 January. To see if solar panels are worth getting in the meantime, see Solar Panels – are they worth it?

How will the new rules work?

The SEG will require suppliers with over 150,000 customers to offer at least one ‘export tariff’ to households that install anaerobic digestion, hydro, micro-combined heat and power (with a capacity below 50 kilowatts) technology, or onshore wind and solar panels with a capacity of up to five megawatts from 1 January 2020.

There will be no set minimum rate – the rules simply state that suppliers must provide a payment greater than 0p per kilowatt hour that is exported back to the grid. Many of the firms are yet to announce their rates.

The rules also state that the exported power must be metered – under the previous FIT scheme, the export tariff was simply estimated at 50% of everything that was generated.

The Government has said that smart meters will be the main form of keeping track of how much households export back to the grid, though it hasn’t ruled out other metering arrangements.

What if I already have solar panels?

The new rules announced this week will only apply to new installations of solar panels and other forms of renewable generation – if you already have them, this change won’t impact you.

Provided you had your solar panels installed before the FIT scheme ended on 31 March 2019, you’ll still be guaranteed those payments – at the rate you signed up to at the time – for between 20 and 25 years (depending on when you signed up).

What does the Government say?

Energy and Clean Growth Minister Chris Skidmore said: “The future of energy is local and the new smart export guarantee will ensure households that choose to become green energy generators will be guaranteed a payment for electricity supplied to the grid.

“We want the energy market to innovate and it’s encouraging to see some suppliers already offering competitive export tariffs to reduce bills. We want more to follow suit, encouraging small-scale generation without adding to consumer bills, as we move towards a subsidy-free energy system and a net zero emissions economy.”