Smart Export Guarantee

Smart Export Guarantee League Table

Which suppliers will offer you the best price for your surplus solar power? Our league table will help you understand your choices and who has the best offer for prosumers.

Flexible SEGs

Provider Tariff Name Tariff Rate
1 Octopus Energy Outgoing Agile Pegged to half-hourly wholesale rate

Fixed-rate SEGs

Provider Tariff Name Tariff Rate
1 Octopus Energy Outgoing Fixed 5.5p

 

E.On Energy have announced a one-year export tariff offer for 500 customers, which matches the 5.24p/kWh rate and mechanism of the previous export tariff under the FiT.

Also, first-mover Bulb is running a trial for 50 customers, offering a fair payment for the exported power at wholesale electricity prices.

 

E.On’s Solar Reward

Pays the first 500 new solar customers 5.24p per every kilowatt-hour (kWh) of energy exported back to the grid on the assumption that 50% of generation is exported. Solar reward export payments apply for the first year only.

Bulb’s alpha trial

50 bulb members who generate their own electricity will be paid for any electricity they generate and export to the grid. This is for solar-only customers, storage-only or solar and storage co-located. It is open to bulb customers who pay by Direct Debit, with a smart meter they can read, and if you are willing to provide feedback.

 

Q&A

 

What support does the government provide today if I want to go solar?

New households seeking to install solar power no longer receive public support, but this reflects how far the cost of installing solar has plummeted. Today, a good quality, straight-forward household solar PV system can be purchased for around £5,000 – less if you take part in a collective purchase scheme. However, the STA has been campaigning hard for fair market payments for any clean power that your households may contribute to the power system, in line with EU Law. The Government will require large electricity suppliers to buy your power in future under the new ‘Smart Export Guarantee’, but their policy proposals are not yet finalised. However, the Government has made clear that households that invest in solar from April 2019 will be eligible to receive these payments, but they are very unlikely to be backdated.

We are closely monitoring any offers from electricity suppliers to buy your clean power and these will be published in our Smart Export Guarantee League Table.

Nevertheless, it still makes good financial sense for people who are likely to use a lot of the power that their solar generates to investment in solar power. Over the waranteed life of your panels solar will generate power today at around 9p/kWh in today’s prices for 25 years, considerably lower than grid power prices (see our economics section). And there are many other good reasons to go solar if you can afford to.

Homes in Scotland can benefit from Home Energy Scotland’s interest-free loans for investing in solar PV and battery storage. If you want to install solar thermal, which provides hot water, then Government support is available through the Renewable Heat Incentive.

 

What is the Smart Export Guarantee? When is it coming?

The jury is still out on how effective the forthcoming Smart Export Guarantee scheme will be until the Government publishes its final decision how this will work. Neither do we know when the Government decision will be published, but we are fairly confident it will be soon and the SEG scheme could be in place by summer 2019. However, it is likely that the following will be the case:

  • There will be a requirement on larger suppliers (those with more than 250,000 electricity customers) to offer a Smart Export Guarantee (SEG). That means they must buy your clean power at a price that the Energy Minister has said will be more than zero.
  • This SEG may have an element of ‘smartness’:
    • This means that the payments you receive for your export may vary depending on how valuable the export is to the electricity system at particular times
    • For instance, if you are exporting electricity at a time when everyone is at home using lots of electricity you could get paid more than when there is no need for more power on the system.
    • There are already tariffs like this from supply companies such as Octopus’s Agile tariff. These tariffs use the varying prices to encourage individuals to shift their electricity use away from times when others are also using a lot of electricity (called ‘peak’ times). Similarly, some SEG tariffs may try and encourage houses to export at times when the electricity system needs more power.
  • The price you are paid will not be below zero at any point
  • Storage exports may be included in these tariffs if it is co-located with solar

Remember – none of this has been confirmed yet!

 

I want to sell my power to the grid. What’s a good price?

The STA has been arguing for households to be treated fairly and to be paid at a fair market rate for the power they contribute to our electricity system, as all other generators are. There are two obvious ways to define fair pricing. One is through wholesale prices, which is the price that the market buys power from to sell to you – in 2018 this averaged around 6p/kWh. The other is the ‘System Sell Price’, which the Government has referenced as a fair price in its SEG consultation. This is the price that larger generators receive for their surplus power when they produce more electricity than they had contractually arranged to produce. To prevent this ‘extra’ electricity from being provided to the system for free, generators can sell their surplus to those that need to buy power to balance their position, and the market establishes the price. This System Sell Price is a market calculated on a half hourly basis and it varies depending on the time of day. However, the annual average System Sell Price last year was very similar (5.4p/kWh) to the previous FIT export tariff payment of 5.2p/kWh.

Unfortunately, so far the Government has only indicated that major suppliers will be obligated to buy power at a price above zero. We believe the Government should protect solar households by ensuring a fair minimum floor price so you cannot be exploited. In our view a fair average price is between 5p and 6p/kWh, though we recognise that power will be worth more or less than that at different times of the day and night.

The good news is the electricity sector is changing fast and there are many suppliers who want to embrace smart energy to help deliver a much more efficient, low-carbon power system, and they want customers who want to participate. Please see our SEG League Table for which suppliers are making the first moves and where you could get the best price for your surplus power.

 

How do smart meters and solar PV work together?

The Government has a major programme to roll out smart meters across the UK and for homes with solar PV there have been a few teething issues which mean you may have to manually read your solar exports for a while, even if you have a ‘smart’ meter. However, this situation should soon resolve and it will happen automatically in future. If you want to understand why there have been issues then read on (it gets a bit complicated!)…..

Suppliers have recently stopped installing the first generation (SMETS1) meters which can ‘go dumb’ after you switch supplier, i.e. they fail to work. Suppliers now only install second generation (SMETS2) meters, which will not ‘go dumb’. This means you can better rely on the smart functionalities SMET2 meters provide, such as sending automatic meter readings to your supplier so you do not have to do it yourself.

Smart meters read how much electricity you are using (i.e. taking in / importing from the grid) every half hour. This enables suppliers to accurately bill you for your electricity use.

Smart meters also are able to read how much clean electricity you export onto the grid every half hour. They should be able to transfer this data from your meter back to your supplier so you can be paid accurately for how much electricity you are putting on to the grid.

Unfortunately, there have been issues with remotely relaying the export readings. Some suppliers have not been able to receive the export readings remotely so they cannot automatically bill you from these reads. Consequently, some suppliers are asking for manual reads of exports from customers’ smart meters to be sent in the old fashioned way – not very smart!

However, this should change for both SMETS1 and SMETS2 meters. All SMETS2 meters will be connected to what is called the Data Communications Company. DCC is the communications hub which allows suppliers to access your meter reads through the smart meters remotely. However, currently the ‘channels’ by which the DCC can access export data from meter readings are not yet established for suppliers. As such, the remote access of export readings is not always possible for these meters… yet. And we are particularly concerned about the ability of third parties, like aggregators, to access your export data.

If you have a SMETS1 it was not initially programmed to link up to the DCC.  However, given millions have now been installed, the electricity suppliers and DCC are currently working together on an ‘adoption and enrolment’ process to ensure that the large majority of SMETS1 meters will be linked into the DCC in the near future, meaning that suppliers will be able to remotely access your meter reads, even if you switch supplier. (It is understood that if you have one of the small minority of SMETS1 meters that cannot be linked up to the DCC then you will have a replacement smart meter installed).

So if you already have a SMET1 meter and you want to install solar power, ask if your meter has been enrolled into the DCC.

For both SMETS1 and SMETS2 meters it is unclear when the above issues will be resolved so you may have to provide manual readings for your solar exports to your supplier for a while. But if you have a SMET2 meter you can be pretty confident that in the future your supplier should be able to remotely access and pay you for how much electricity you export per half hour. This has the potential to become exciting because it means that, particularly if you have battery storage, you will be able to control when you put power on the system, and markets should soon develop to buy your power at a high premium price at times when the system needs it.

 

I want to install solar. Do I have to have a smart meter?

It remains entirely your choice to have a smart meter installed by your supplier. Despite the teething difficulties we have outlined for solar, there are many benefits to installing a smart meter.

If you want to be paid for the electricity you export to the grid then suppliers will want to be able to tell how much you are exporting and when. This will require a meter that is capable of recording this, likely on a half hourly basis. Smart meters are capable of recording this and they are provided for free by suppliers.

There are export meters that are not smart meters which would be able to be installed to provide this data. However, these can be expensive and it will be up to the supplier to indicate whether this would be an acceptable alternative. These meters may not be able to be remotely read by your supplier meaning that they will have to trust the meter readings that you send in or verify the reads another way (for instance by an annual site visit). However, this has risks and costs associated with it for the supplier who may not opt for this option.

 

I already have solar PV installed and receive FiTs- will a smart meter affect this?

It will not affect the value of the price you are paid for each unit of solar power you export, which under the FIT export tariff is currently 5.2p/kW (index linked). However, installing a smart meter may affect how many units of power you are paid for in future. Whether this is a positive or negative change will depend on whether you are at home or out most the day and whether you export more than half of your power to the grid or not.

Due to the issues we have outlined for suppliers accessing export readings from smart meters, there is unlikely to be an immediate change to your FiT payments, even if you are receiving the deemed export tariff, which assumes you export half of the power your produce. However, if you install a smart meter, this will change at some point. Suppliers are required to move customers off deemed export payments to metered export payments when it is possible and practical to do so. When it is possible to remotely read export meter readings from the smart meters, suppliers will likely have to move FIT customers off deemed export tariffs to metering them.

Some individuals have found that, with the installation of a smart meter, their electricity bill has changed, due to the payment they receive reflecting how much of their solar power they actually export. Many households export more than half of their power to the networks, so they could end up better off. The installation of a smart meter should not affect total generation reads.