men working on roof

What is SEG?

17 July 2019

The UK Government introduced the Feed in Tariff (FiT) in Oct 2011, to support renewable energy generation up to 5MW; eligible technologies included solar PV, onshore wind, biomass, hydropower and micro CHP. FiT consisted of two tariffs:

  • Generation Tariff: a payment for every kilowatt hour (kWh) of electricity generated by the system
  • Export Tariff: a payment of 5p/kWh for the electricity exported to the grid

The FiT scheme ended on 31st March 2019 to be replaced by the Smart Export Guarantee Scheme (SEG). Unfortunately the Department for Business, Energy and Industrial Strategy (BEIS) did not have the scheme in place, in time, which left a policy gap that caused uncertainty in the market and substantially affected deployment rates, with solar PV installations dropping by 94%.

roof covered in solar panels

Subject to parliamentary approval The Smart Export Guarantee Scheme will be officially introduced by the end of June 2019 to ensure that small-scale generators {households and businesses) exporting electricity to the grid would be legally compensated by their suppliers. Highlights of the scheme :

  • No minimum tariff rate
  • Meters capable of reading export on a half-hourly basis
  • Increased innovation
  • Lower cost to energy consumers
  • Transition to smart flexible electricity systems
  • Lower administration overheads
  • Suppliers with over 150000 customers must offer a SEG tariff
  • The SEG tariff must be greater than 0
  • Suppliers with a customer base under 150000 could opt in
  • Possible compensation for energy storage

This all being said, the Energy Saving Trust may welcome SEG, but also acknowledge that early offerings in the marketplace may not be enough to make solar PV affordable to the average homeowner or small business, unlike the 7m customers who were able to afford it under FiT. The Energy Saving Trust is championing an effort for additional support which would allow more homeowners to take advantage of solar PV.

The policy gap has left many questions unresolved, this has lead to significant uncertainty in the marketplace, for both renewable energy installers and customers. Small renewable energy businesses are struggling to survive and the UK is drifting further behind on our low carbon targets.

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