The British government is seeking views on introducing a new scheme that would pay households and businesses for surplus electricity produced by small-scale renewables such as solar panels.
This follows the planned scrapping of the feed-in tariff for solar installations in April, and numerous other challenges which will likely come to fore in the months and years ahead.
Under the proposed Smart Export Guarantee (SEG), which would replace the export tariff under the previous feed-in tariff scheme, larger energy suppliers, specifically those with over 250 000 electricity customers, would have to pay customers for power generated that is exported to the grid. Smaller suppliers would have the option to provide a SEG tariff.
The proposal is currently in a consultation process to decide on if, and how, to proceed with the SEG. The consultation will be open until early-March.
The majority of the feedback from trade bodies, suppliers and generators suggest that the SEG could be extended to include a larger amount of suppliers by, for example, adopting a lower threshold of 150,000 domestic customers, or alternately, not applying any minimum size threshold, thereby including all suppliers.
Under the new scheme, suppliers would determine the tariff per kWh, as well as the length of the contract, and the supplier would be obliged to provide at least one export tariff.
They will not however, be eligible to recover costs by charging customers during times of negative pricing. Furthermore, electricity supplied to the grid would have to be metered, though domestic installations would be measured by smart meters.
The Department for Business, Energy & Industrial Strategy (BEIS) intends to legislate in favour of the SEG whilst having no additional role in provision or administration and Ofgem would have the lead role in monitoring, fraud prevention and enforcement.
Technologies which would be covered by the scheme are envisioned to include small-scale solar panels, combined heat and power (CHP), anaerobic digestion and hydropower.