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New laws to guarantee payment for solar homes providing excess electricity

New solar homes and businesses creating and exporting electricity to the grid will be guaranteed a payment from suppliers under new laws to be introduced by the government this week (Monday 10 June).

The Smart Export Guarantee (SEG) will ensure small-scale electricity generators installing solar, wind or other forms of renewable generation with a capacity up to 5MW will be paid for each unit of electricity they sell to the grid – tracked by their smart meter.

Residential solar panels are now over 50% cheaper than in 2011. SEG will build on the previous government subsidy scheme, which drove the installations of 850,000 small-scale renewable projects, but without passing on the cost to consumers.

Encouraging suppliers to competitively bid for electricity will give households the best market price for their energy, while providing the local grid with more clean, green energy, as the UK bids to become a net zero emissions economy.

Energy and Clean Growth Minister Chris Skidmore, said:

The future of energy is local and the new smart export guarantee will ensure households that choose to become green energy generators will be guaranteed a payment for electricity supplied to the grid.

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.

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.

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