The government’s feed-in-tariff (FIT) closed to applications on 1 April 2019 and has since been replaced by the smart export guarantee (SEG) scheme. Households and businesses that successfully applied for the FIT scheme before this date will continue to receive payments. Households and businesses looking to receive payments for their renewable energy production for the first time can apply for the SEG scheme.
What is a feed-in tariff?
A feed-in tariff pays an individual or a business for surplus energy produced from renewable energy technology, such as solar panels or wind power installed at the domestic or commercial property. The customer is paid for each unit of energy produced, with a separate fixed rate for each unit of energy sold back to the National Grid.
How do feed-in-tariffs work?
The scheme was created to encourage homeowners and businesses to invest in renewable or low carbon energy generating technology such as:
- Solar panels
- Wind turbines
- Hydro turbines
- Anaerobic digestion
- Micro-combined heat and power (micro-CHP)
To qualify for a FIT, the installed technology is required to have a peak output of no more than 5 megawatts or 2 kilowatts for micro-CHP. It also has to be certified under the Microgeneration Certification Scheme (MSC), or the ROO-FIT process for hydro and anaerobic digestion.
How do I secure the best feed-in tariff?
The rate paid by your energy provider is a combination of a fixed rate per unit of energy produced plus an additional amount for units of energy sold back to the National Grid. These rates are fixed by the National Grid, so no one energy provider can provide a better rate than another for FITs.
If you have a smart meter installed, you’ll be able to see exactly how much electricity you send to the National Grid. There are also limits on how much you can earn, called deployment caps. These restrict the FIT payments that you can receive during a given tariff period.
What is the smart export guarantee (SEG)?
Replacing the FIT scheme, the SEG came into place on 1 January 2020. Like the FIT scheme, it pays the user for any surplus renewable or low carbon electricity produced. Unlike the FIT scheme, the SEG only pays for surplus energy and offers no tariff for energy produced before a surplus is reached. However, with SEG, energy companies pay different rates and there is now a competitive market. Rates generally vary between 3p to 5.5p per kilowatt-hour of exported energy.
The types of technology that are eligible for SEG are the same as the FIT scheme, as are the output limits.
In order to qualify for the SEG you’ll need:
- An installed renewable or low carbon technology in your business
- A smart meter
How do I apply for the SEG?
You’ll firstly need to search for an SEG licensee in your area. The SEG licensee can be different from your energy supplier, and since they offer different rates you may wish to shop around for the best deal.
Once you have found an SEG licensee, you’ll need:
- A smart meter or half-hourly export meter reading
- Your MSC certification
- Proof of technology ownership
- SEG application form (can usually be found on your provider’s website)
- For anaerobic digestion, additional paperwork is required. This can be found on Ofgem’s website.
At Eneco Consulting, our extensive experience with renewable technology and government schemes means that we can guide and assist with setting your business up on a competitive SEG scheme.
Get in touch to speak to one of our expert energy consultants.
