UK To Introduce Net Metering For Small-Scale RE

The Department for Business, Energy & Industrial Strategy (BEIS) in Britain has announced it plans to launch a payment guarantee scheme for small-scale electricity consumers installing renewable energy sources and feeding excess electricity to the grid. The technology used could be solar, wind or other forms of renewable energy generation paired with smarty meters and battery storage. Capacity of up to 5 MW will be paid for each unit of electricity sold to the grid, and will be tracked by their smart meter.

Open to homes and businesses, the government calls it the Smart Export Guarantee (SEG) scheme. In January 2019, the department sought consultation on the SEG proposal (see UK Proposes Smart Export Guarantee Scheme).

Energy suppliers with more than 150,000 customers will be under obligation to introduce at least one export tariff by January 1, 2020 which must always be above zero. These suppliers cover over 90% of the retail market. Under the scheme, they will be required to competitively bid for the renewable energy generated by homeowners to allow households the best market price for power they can feed into the grid.

By December 31, 2019 all relevant suppliers are expected to be compliant with the SEG requirements. Final proposals published by the government can be viewed on the British government’s website.

SEG will replace a feed-in-tariff (FIT) scheme that was in operation till March 31, 2019 and which helped install 850,000 small-scale renewable energy projects. The department said the fee will not be added to consumer bills as part of the UK’s transition to a subsidy-free, cleaner and greener energy system under the new scheme.

“These smart export tariffs are game changing when it comes to harnessing the power of citizens to tackle climate change. They mean homes and businesses can be paid for producing clean electricity just like traditional generators, replacing old dirty power stations and pumping more renewable energy into the grid,” explained Chief Executive of Octopus Energy, Greg Jackson. Octopus Energy is the only utility with a voluntary tariff for solar exports, according to Solar Trade Association (STA).

The association appreciates the mechanism calling it simple, enabling energy suppliers to structure tariffs and that installation standards will be safeguarded through mandatory certification of MCS or equivalent for the systems to be installed. It also points out that the door has been kept open for power exported from co-located battery storage for remuneration.

The STA opines that ‘meaningful and innovative’ offers will be crucial to the success of the SEG policy which will encourage development of a competitive market to purchase power from smart, solar homes at a fair market price.

“Nevertheless, we are hopeful that there are innovative electricity supply companies who understand the importance of incentivising homeowners who want to install solar, battery storage and EV charging as we move towards a smart energy system,” said STA Director of Advocacy and New Markets Léonie Greene. “Barriers still need to be resolved and it is incumbent on government to remove these to encourage as thriving and competitive a market as possible, including for aggregators.”

Even though the administration hasn’t been too fond of solar in the past going by 64% cuts it introduced for solar FIT in December 2015, the country is benefiting from the technology as it spent several days without coal power supply with solar strong in the energy mix (see Britain Goes Without Coal For Over 10 Days). The National Grid Electricity System Operator announced on June 5, 2019 the country’s coal-free run came to an end after 18 days and 6 hours.

UK Labour Party head Jeremy Corbyn has also promised 1.75 million rooftop solar homes with focus on low-income households if he gets to hold the reins of the government (see UK Labour Party Promises 1.75mn Rooftop Solar Panels).