Last reviewed 10 June 2019

Green businesses generating renewable and low-carbon electricity will be guaranteed money for power supplied to the grid.

The Smart Export Guarantee (SEG) will ensure small-scale electricity generators, including local businesses, that install solar, wind or other forms of renewable generation with a capacity up to 5MW will be guaranteed payment for each unit of electricity they sell to the grid.

The scheme is designed to help the UK’s prospects of becoming a net zero emissions economy by 2050. Energy and Clean Growth Minister Chris Skidmore, said:

“The future of energy is local... We want the energy market to innovate and it’s encouraging to see some suppliers already offering competitive export tariffs to reduce bills. We want more to follow suit, encouraging small-scale generation without adding to consumer bills, as we move towards a subsidy-free energy system and a net zero emissions economy.”

Solar panels are now over 50% cheaper than in 2011. SEG will place a legal obligation on energy suppliers with over 150,000 customers — covering more than 90% of the retail market — to introduce export tariffs by 1 January 2020.

Some energy suppliers, including Octopus and Bulb, are already offering new smart tariffs, with some exceeding those offered under the previous subsidy scheme. At peak, solar has provided more than a quarter of the UK’s energy demands. Chief Executive of Octopus Energy, Greg Jackson, said the new scheme will empower people to tackle climate change.

“They mean homes and businesses can be paid for producing clean electricity just like traditional generators, replacing old dirty power stations and pumping more renewable energy into the grid. This will help bring down prices for everyone as we use cheaper power generated locally by our neighbours.”

The Government is keen to encourage businesses to store energy in batteries which they can monitor on smart meters, respond to price signals and choose the most economical times to charge their equipment and sell their electricity back to the grid, which will also cut energy bills.

Legislation enacting the SEG will be laid before Parliament on 10 June and implemented on 31 December 2019 for mandated suppliers. The Government’s response, setting out final policy design, will also be published on 10 June.

Further details of the Smart Export Guarantee (SEG) are available at GOV.UK.