A new arrangement for small-scale renewables is in most instances expected to result in generators receiving less income than would have been available to similar-sized installations previously. The Smart Export Guarantee (SEG), having come into force from January 1st 2020, has been introduced following last year’s closure of the Feed in Tariff (FIT) scheme to new entrants. All existing FIT recipients will be unaffected, with rates guaranteed typically for 20 or 25 years from registration.
Whilst FITs guaranteed registered participants separate fixed rates both for generated and exported renewable electricity, the SEG only applies to exported energy. Energy suppliers above a minimum size are obligated to offer a SEG tariff, however unlike the FIT scheme rates are not fixed annually by Government. Rather, the only requirement placed on suppliers is that SEG tariffs must always remain above 0p/kWh.
SEG tariffs in the initial weeks following launch vary from supplier to supplier, with the range spanning from a low of 1.5p/kWh to a high of 5.5p/kWh. This is significantly lower than the last FIT rates for existing installations (9.17p/kWh when generation and export both accounted for). In order to therefore maximise the commercial and environmental benefit of PV systems, new developments should prioritise electrical designs which utilise as much renewable electricity on site as possible.
Posted on March 4th, 2020
Author: Jonathan Thomas-Peck
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