The UK's Department for Business, Energy and Industrial Strategy (BEIS) is seeking feedback on its proposal to introduce a mandatory supplier-led route to market for small-scale low-carbon generation that it calls Smart Export Guarantee (SEG). It proposes this scheme to replace the existing feed-in-tariff (FIT) scheme.
Under the current FIT regime, accredited households and businesses installing small scale electricity generation are assumed to export 50% of the electricity they produce and are paid for it when this power is not needed by the grid or they export less than 50%. This scheme currently costs consumers around £1.2 billion ($1.53 billion) annually, according to BEIS. With solar costs having come down by 80% since 2008, it wants to review the scheme.
The SEG would ensure transparency, says BEIS, as it would ensure guaranteed payments for the energy generators produce by using established smart technology. The new scheme could create a whole new market as it would encourage suppliers to competitively bid for this electricity and provide best market price to the exporters.
"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; a win-win for consumers and the environment and a key part of our modern Industrial Strategy," said Energy and Clean Growth Minister Claire Perry.
An overwhelming majority or 99% of installations accredited under the FIT scheme are solar systems that makes up 80% of capacity. It means more than 830,000 solar installations are producing clean power for 2 million homes in the UK, overachieving its original target by nearly 100,000 installations. The scheme will close for new applicants on March 31, 2019.
BEIS will be accepting consultation on the SEG proposal till March 5, 2019. More details are available on the department's website.