As the UK continues to prioritise renewable energy solutions and carbon reduction measures, many homeowners are looking at solar panels as an effective way to cut down energy costs and reduce their environmental footprint. If you’re considering installing solar panels, you’ve likely heard of the Feed-in Tariff (FIT) and the Smart Export Guarantee (SEG) schemes, which provide financial incentives for generating and exporting renewable electricity.
This blog will explore the current feed-in tariff for solar panels, how the Smart Export Guarantee works, and how these incentives are relevant for customers of The Edinburgh Boiler Company who are looking to embrace renewable energy.
A Brief Overview of the Feed-in Tariff (FIT) Scheme
The Feed-in Tariff (FIT) scheme was introduced by the UK government in 2010 to encourage the adoption of renewable energy technologies, including solar panels, wind turbines, and anaerobic digestion. The scheme aimed to provide financial incentives to homeowners and businesses who generated renewable electricity, rewarding them for both the electricity they used and the electricity they exported to the grid. Over the years, the FIT scheme has helped many households, including those served by The Edinburgh Boiler Company, to reduce their energy bills while contributing to the nation’s goal of achieving a low-carbon economy.
However, the FIT scheme closed to new applicants in March 2019. This means that new solar panel installations are no longer eligible for the FIT payments. Despite the closure, those who installed solar panels before 2019 are still benefiting from FIT payments for the duration of their contracts, which typically last for 20 years from the commissioning date of their system.
The Smart Export Guarantee: The Successor to FIT
With the FIT scheme now closed to new applicants, the Smart Export Guarantee (SEG) has taken its place. This new scheme provides payments to solar panel owners who export their renewable electricity to the grid. Unlike the FIT scheme, which provided both generation and export payments, the SEG focuses exclusively on the export element. This means that solar panel owners who have installed their systems after March 2019 can now receive payments for any excess electricity they generate and export to the national grid.
For customers of The Edinburgh Boiler Company, the SEG offers a valuable financial incentive to make the most of their solar panel systems. The key difference between the SEG and the FIT scheme is that the SEG only applies to exported electricity, while solar panel owners are still able to use the electricity generated by their systems for their own energy needs.
How the Smart Export Guarantee Works
Under the SEG, energy suppliers are required to offer tariff rates to solar panel owners for the electricity they export to the grid. These rates can vary depending on the energy supplier, and they are typically lower than the generation tariff rates offered under the FIT scheme. To qualify for the SEG, solar panel systems must be installed by accredited installers, and either a smart meter or an export meter must be used to measure the electricity being exported.
For customers of The Edinburgh Boiler Company, this means that after installing solar panels, they can choose an energy supplier that offers the best export tariff. By exporting surplus electricity, you can earn additional income or offset your energy costs. In addition, the SEG helps to ensure that more renewable electricity is fed into the electricity grid, reducing the reliance on fossil fuels and contributing to the country’s carbon reduction goals.
FIT Payments for Existing Solar Panel Owners
For those who installed solar panels before 2019, the FIT scheme remains in place, providing both generation and export payments. The generation tariff is paid for every kilowatt hour (kWh) of electricity generated by the solar panel system, while the export tariff is paid for the electricity that is exported to the grid. The generation tariff and export tariff are typically paid over a 20-year period, with the rates being set when the system was installed.
Customers of The Edinburgh Boiler Company who are still benefiting from the FIT scheme can rest assured that they will continue to receive their FIT payments for the duration of their contract. It’s important to note that FIT payments are calculated based on the total installed capacity of the solar panel system and the applicable tariff rates at the time of installation. These payments are typically adjusted annually in line with the Retail Price Index (RPI), ensuring that the payments remain in line with inflation.
How Exported Electricity Plays a Role
The amount of electricity that is exported to the grid plays a crucial role in determining how much money a solar panel owner can earn. Solar panel systems generate renewable electricity during daylight hours, and any surplus electricity can be exported to the grid. The export tariff, whether under the FIT scheme or the SEG, is typically paid for this excess electricity.
For customers of The Edinburgh Boiler Company, the amount of exported electricity depends on how much energy is generated by their solar panels and how much energy they consume. If a household uses more energy than the solar panels generate, the energy will be drawn from the grid. However, if the solar panels generate more electricity than is needed, the excess can be exported to the national grid, earning the homeowner export payments. It’s important to have a smart meter or export meter installed to ensure accurate measurement and payments for exported electricity.
FIT and SEG Payments: What Can You Expect?
The payments you receive under the FIT or SEG scheme depend on the amount of electricity you generate and export, as well as the tariff rates available at the time of installation or when you signed up for the SEG. The FIT generation tariff and export tariff are typically paid on a quarterly basis for FIT customers, while SEG payments are usually made monthly or quarterly, depending on the energy supplier.
For those still receiving FIT payments, the amount of money earned from generation payments and export payments can be substantial. However, the rates for export payments under the FIT scheme are based on deemed exports, meaning solar panel owners are paid for a fixed percentage of the electricity they generate, regardless of the actual amount exported.
Under the SEG, the export tariff is paid based on actual exports, as measured by the export meter. The rates for export tariffs vary depending on the energy supplier, but they provide an excellent opportunity for solar panel owners to receive compensation for their renewable electricity.
The Future of Solar Incentives in the UK
While the FIT scheme may have closed to new applicants, the SEG continues to play an important role in supporting the UK’s transition to a low-carbon economy. As more homeowners and businesses choose to install solar panels, the need for financial incentives and carbon reduction measures will remain important. For customers of The Edinburgh Boiler Company, the SEG offers a clear and straightforward way to receive payments for exported electricity, ensuring that your solar panel system continues to deliver financial and environmental benefits for years to come.
What Support Is Available Now?
With the feed-in tariff closed to new applicants, homeowners now rely on a mix of other schemes. Our complete guide to solar incentives in Scotland rounds up what’s currently on offer.
Conclusion
Whether you’re considering installing solar panels for the first time or are already benefiting from FIT payments, understanding the current feed-in tariff for solar panels in the UK is essential. For new solar panel systems, the Smart Export Guarantee provides a great opportunity to receive payments for exported electricity, while those with older systems can continue to benefit from the FIT scheme.At The Edinburgh Boiler Company, we’re committed to helping our customers make the most of their solar panel systems, not only through expert installation but by ensuring they understand how to take advantage of renewable energy incentives like the SEG. Embracing solar power is a key step towards reducing energy bills, lowering carbon footprints, and contributing to the UK’s renewable energy goals.
