The Smart Export guarantee is a relatively recent initiative – the most significant announcement of its launch was only in June of this year. However, while it technically only applies to energy suppliers, it’s caught the attention of customers too – and with good reason! If you’ve already heard a bit about the Smart Export Guarantee, you may be wondering how it relates to you, and how commercial solar panels and other installations will be affected. Here, we go into a bit more detail about what the SEG involves, and how you can expect to benefit.
What is the Smart Export Guarantee?
The Smart Export Guarantee, or SEG, is a new government initiative designed to incentivise renewable energy methods like solar panels. It does this by setting obligations for licensed electricity suppliers to offer a tariff to homeowners, business owners and organisations, paying them for any excess electricity they generate which can be used to power the National Grid.
You may well know all about the Feed In Tariff, which was the previous government scheme with this sort of remit. The government intends the Smart Export Guarantee to be its successor. Part of the reason that the Feed In Tariff ended was that it was deemed to costly to maintain for new entrants, and the government wanted to replace the scheme anyway in order to focus on marketplace competition rather than subsidies.
This is why the Smart Export Guarantee won’t be based on payments from the government. Instead, it enables customers to sell their excess energy back to the National Grid directly via their energy suppliers. According to the SEG, only energy companies with more than 150,000 customers will be required to participate, but the government says that this covers about 90% of the market anyway.
How does the Smart Export Guarantee work?
With the Feed In Tariff, the rates were set by Ofgem, the government regular for energy prices. However, the SEG differs in that it lets suppliers set their own prices. While that may not sound like good news at first, the reality is that the supplier with the best prices is probably going to win the most business. The intention is that this will naturally create a competitive market with companies trying to outbid each other, so that the consumer is ultimately the one who benefits.
The Smart Export Guarantee is also designed to be fairer than the Feed In Tariff right off the bat, too. Previously, the government paid businesses and homeowners only up to 50% of their unused solar generated electricity, even if they were exporting much higher levels than that. However, when the Smart Export Guarantee is in place, energy suppliers will pay homeowners for the full amount, however much or little that might be.
So, when does the Smart Export Guarantee come into effect? Well, the current plan is for it to launch in January 2020, so you’ve not got long to wait! However, it won’t fully come into force until a few months after that, which gives you plenty of time to think about your own solar panel system.
Here at Low Carbon Energy, we’ve got over 30 years of combined experience, so you can count on us to be able to create a system that’s specifically tailored for the requirements of your premises, providing maximum efficiency and return on investment. Feel free to give us a call today on 01282 421 489 to see how we can help you move towards cheap, green, unlimited energy!