Selling Renewable Energy
Recent changes to the rules around renewable energy payments have many homeowners wondering how these updates will affect them. With the growing push for greener solutions, generating your own renewable energy is not only a way to lower electricity bills but also a chance to make a positive impact on the environment. But with the new rules in place, what does this mean for you?
Solar panels remain the most popular way for UK homeowners to generate renewable energy.
They harness the photovoltaic effect to convert sunlight into electricity, which can power your home or charge a battery.
Roof installations are the most common, but panels can also be placed in gardens or any sun-exposed area. If your roof is nearing the end of its lifespan, solar shingles offer an exciting alternative.
Unlike standard panels that sit on top of the roof, these shingles actually replace your roof tiles while generating electricity.
Wind turbines and hydro power, if you have access to flowing water, are also renewable options worth exploring. As the rules change, it’s crucial to stay informed so you can continue benefiting from your investment in renewable energy while making a meaningful contribution to the planet.
The Feed-in Tariffs (FITs) scheme closed to new applications on 31 March 2019. However, the Smart Export Guarantee will come into force from 1 January 2020.
How Renewable Energy Works
Renewable energy systems are transforming the way we power our homes. Understanding the intricacies of these systems can help you make informed decisions about your energy needs.
Here’s a closer look at how solar, wind, and hydro power systems function:
Solar Photovoltaic Array
Components and Function: A solar photovoltaic (PV) array consists of multiple solar panels connected electrically. Each panel is made up of solar cells that capture sunlight and convert it into direct current (DC) electricity. This process is known as the photovoltaic effect.
Energy Conversion: The DC electricity produced is then sent to a solar power inverter. This inverter converts DC power into alternating current (AC), which is the type of electricity used by most home appliances. Without this conversion, your solar energy would be unusable for household needs.
Utility Meter
Measurement: Your household utility meter tracks your electricity consumption. It measures how much power your home uses and ensures accurate billing. This meter is connected to your PV system and records how much energy you generate and use.
Grid Interaction: Any surplus energy that exceeds your home’s needs is sent back to the electric grid. During periods when your solar system isn’t producing enough power—such as at night or on cloudy days—you can draw power from the grid to meet your needs.
Battery Bank
Storage and Use: Although not essential, installing a battery bank can be highly beneficial. It stores excess energy generated by your solar panels for use when sunlight is insufficient, such as during the night or on overcast days.
Charge Controller: A charge controller is crucial for protecting your battery bank. It regulates the flow of DC electricity from your solar panels to the batteries, preventing overcharging and potential damage.
Wind and Hydro Turbines
Operation: Wind turbines and hydro turbines work on a similar principle. Wind or flowing water turns a rotor, which is connected to a generator. This generator produces DC electricity, which is then converted to AC power using an inverter.
Integration: Like solar systems, wind and hydro systems can be integrated into your home’s energy setup. They provide a renewable source of energy and can be particularly effective in areas with consistent wind or water flow.
Inside this easy to read free guide, discover how to make your home environmentally friendly.
Exporting Energy To The Grid
Exporting electricity to the grid doesn’t actually involve selling it to the National Grid itself. Instead, supplying the grid with surplus power requires you to sell it back to an energy supplier.
Feed-in Tariffs (FIT) scheme
The Feed-in Tariffs (FIT) scheme was a government programme. Which is introduced on 1 April 2010 to promote the uptake of renewable energy technologies. Under FITs, householders received payments for the electricity generated by eligible installed systems. For example solar PV, wind or hydro turbines and additional payments for the excess energy exported to the grid.
Some 800,000 householders with solar panels benefit from payments under the Feed-in Tariffs scheme. However, the subsidies were controversially scrapped by the government in April 2019. The reason is the number of new installations to fall by 94% in May from the month before.
The Feed-in Tariffs (FITs) scheme closed to new applications on 31 March 2019.
This means that:
- Householders that installed an eligible system and have already successfully applied for FITs payments are unaffected by the scheme closure.
- Householders that have installed an eligible system with a Microgeneration Certification Scheme (MCS) certificate dated on or before 31 March 2019 have until 31 March 2020 to apply to the scheme.
- Householders that have not installed an eligible system on or before 31 March 2019 will not be eligible for FITs payments.
After the government recognised the need to pay small-scale renewable energy generators for the electricity they export to the grid. The Department for Business, Energy and Industrial Strategy (BEIS) decided to introduce the Smart Export Guarantee (SEG).
The Smart Export Guarantee will come into force from 1 January 2020.
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The Smart Export Guarantee
Under The Smart Export Guarantee scheme, all licenced energy suppliers with 150,000 or more customers must provide at least one Smart Export Guarantee tariff. Smaller suppliers can offer a tariff if they want to.
There are no payments for Renewable Energy from electricity generation – only payments for the electricity that is exported to the grid. However, unlike the Feed-In Tariffs scheme, there will not be any requirement for properties to meet minimum energy efficiency standards.
The technology and installer used by householders must still be certified under the Microgeneration Certification Scheme (MCS) or equivalent (Energy suppliers may ask you to provide a MCS certificate to prove your installation meets this standard).
Exported power must be metered using a meter capable of reading exports on a half hourly basis, even if half hourly readings are not required for the tariff. Meters must also be registered for settlement.
Green/Brown Energy
Understanding the difference between green and brown energy is becoming more important for UK homeowners, especially with the rise of battery storage solutions.
Green energy is the electricity you generate directly from renewable sources, like solar or wind. Brown energy, on the other hand, refers to the electricity you import from the grid and store in your system.
With the Smart Export Guarantee (SEG), energy suppliers now have the option to include battery storage in their tariffs, but it’s not required by law. This creates a bit of uncertainty.
Some suppliers may choose to differentiate payments for green energy only, while others may also pay for brown energy stored in your system. It’s crucial to check with your installer about how to separate your green energy from imported brown energy to maximise your benefits.
These changes can feel confusing, but by staying informed and asking the right questions, you can make the most of the opportunities available. Understanding how your supplier handles storage can impact your earnings and help you navigate this evolving landscape confidently.
Smart Export Guarantee Rates
There are no set or minimum tariffs for the Smart Export Guarantee – the only requirement is that the tariff must be greater than zero at all times. In practice, this means that it is up to energy suppliers to decide what tariffs to offer their customers.
A fair, average price currently falls between 5p and 6p/kWh – the Solar Trade Association website lists the current deals available.
You cannot receive SEG payments if you already receive payments under the Feed-in Tariff scheme, although you can choose to opt out of your Feed-in Tariff and receive SEG payments instead
The Future of Selling Renewable Energy
The way homeowners sell renewable energy back to the grid is evolving, and it’s essential to stay informed. With the end of the Feed-in Tariff (FIT) scheme, many are wondering how they can still benefit from generating their own solar or wind power.
The good news is that the Smart Export Guarantee (SEG) offers a new opportunity for those looking to sell excess energy.
However, SEG payments are often lower than the old FIT rates. This shift can feel disappointing for many, but there’s a silver lining. Unlike FITs, SEG has no minimum energy efficiency requirement, making it more accessible for a wider range of homeowners. So, even if your property isn’t perfectly insulated, you can still earn from your green energy efforts.
Before committing, it’s vital to discuss your options with both your installer and energy supplier. Each provider offers different rates, so finding the best deal is key.
By staying informed and generating renewable energy, not only can you contribute to a cleaner planet, but you can also create an additional income stream from your investment.
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