Feed-in Tariff and Smart Export Guarantee explained

The Feed-in Tariff (FiT) scheme, which previously paid homeowners for generating renewable electricity, closed to new applications on 31 March 20191. If you have a microgeneration system, you can no longer apply for FiT, but you can still earn money for your exported electricity through the Smart Export Guarantee (SEG). Fuse Energy offers a competitive rate for this.

Making the most of your exported electricity can significantly impact your energy bills. Fuse Energy offers a competitive SEG rate and supports you through the process of earning from your microgeneration system. With clear, step-by-step guidance and a commitment to transparent service, Fuse empowers you to maximise your energy independence. Click here to switch to Fuse Energy today.

What was the Feed-in Tariff (FiT) scheme?

The Feed-in Tariff (FiT) scheme was a UK government initiative designed to encourage the uptake of small-scale renewable and low-carbon electricity generation technologies. Introduced on 1 April 2010, it provided financial incentives to homeowners and businesses that generated their own electricity, primarily through solar panels or wind turbines.

Purpose and benefits of FiT

The primary purpose of FiT was to promote renewable energy generation by offering payments for both the electricity generated (generation tariff) and any surplus electricity exported back to the National Grid (export tariff). This dual payment structure made investing in microgeneration systems more financially attractive, helping to reduce payback periods and increase energy independence. Participants received regular, index-linked payments for up to 25 years, providing a stable income stream and contributing to the UK's renewable energy targets.

Eligibility criteria for FiT

To be eligible for the FiT scheme, microgeneration systems typically needed to meet several criteria. These included being installed by an installer certified under the Microgeneration Certification Scheme (MCS) and having a total installed capacity of up to 5 megawatts (MW), or 2 kilowatts (kW) for micro combined heat and power (CHP) systems. The installation also had to be registered with an approved FiT licensee, which was usually an energy supplier.

When did the Feed-in Tariff scheme close?

The Feed-in Tariff scheme officially closed to new applications on 31 March 2019. This means that any microgeneration system installed or registered after this date is not eligible to receive FiT payments.

Impact on Existing FiT participants

For those who successfully applied and registered their systems before the closure date, the FiT scheme continues as originally agreed. Existing FiT participants still receive payments under their original terms, managed by their chosen FiT licensee. These payments typically last for 20 years from the date of registration, providing a continued financial benefit for their renewable energy generation.

Why the scheme was replaced

The FiT scheme was replaced primarily because it had achieved its objective of stimulating the microgeneration market. The cost of installing renewable technologies, particularly solar photovoltaic (PV), had fallen significantly, making the generous subsidies of the FiT scheme less necessary. The government aimed to create a more market-led mechanism for rewarding exported electricity, leading to the introduction of the SEG. Ofgem, the UK's energy regulator, administers the FiT scheme and oversees the SEG.

Introducing the Smart Export Guarantee (SEG)

The SEG was introduced on 1 January 2020, replacing the FiT scheme for new microgeneration installations. It offers a new way for homeowners to earn money from the renewable electricity they generate and export to the grid.

How SEG works for microgenerators

Under the SEG, licensed energy suppliers pay microgenerators for every unit (kWh) of electricity they export to the National Grid. Unlike the FiT scheme, which had a fixed export tariff, SEG rates are set by individual energy suppliers and can vary. This encourages competition among suppliers to offer attractive rates to homeowners. To participate, you need an eligible microgeneration system and a smart meter that can record your exported electricity. You can learn more about how these meters work in our guide to a smart meter installation.

Key differences between FiT and SEG

The main difference between FiT and SEG lies in their payment structures and eligibility. FiT offered both a generation tariff (for all electricity produced) and an export tariff (for surplus electricity exported), with payments often fixed for a long term. SEG, however, focuses solely on payments for exported electricity, and the rates are variable, set by individual suppliers, and can change over time. FiT was a government subsidy, while SEG is a market-led mechanism.

Eligibility for SEG tariffs

To be eligible for an SEG tariff, your microgeneration system must typically meet the following criteria:

• It must have an installed capacity of up to 5MW, or 50kW for micro combined heat and power (CHP) systems.
• It must be installed by an MCS-certified installer (or equivalent certification for larger systems).
• You need a smart meter capable of sending half-hourly export readings to your energy supplier.
• You must have Distribution Network Operator (DNO) connection approval (G98/G99 paperwork) for your system.

Energy suppliers with at least 150,000 domestic electricity customers are mandated to offer an SEG tariff.

How to get paid for your exported electricity with Fuse Energy

If you are looking to earn from your exported electricity, Fuse Energy offers a straightforward process and a competitive rate under the SEG.

Fuse Energy's competitive SEG rate

Fuse Energy offers a competitive SEG rate of 13p per kWh for exported electricity. This rate demonstrates Fuse's commitment to fairly compensating microgenerators and empowering homeowners to maximise their earnings from solar PV or other microgeneration systems.

Required documents: MCS certificate and DNO approval (G98/G99)

To apply for an SEG tariff with Fuse Energy, you will need two key documents:

1. MCS certificate: This proves your microgeneration system was installed by a certified professional and meets UK quality and safety standards.
2. DNO connection approval (G98/G99 paperwork): This document confirms that your system has been approved for connection to the National Grid by your DNO. G98 covers smaller systems with a 'notify and connect' process, while G99 applies to larger systems requiring pre-approval from the DNO.

Fuse's assistance with export MPAN generation

If you do not yet have an export MPAN (Meter Point Administration Number) - a unique identifier for your electricity export supply - Fuse Energy can help you generate one. You provide Fuse with your DNO connection approval (G98/G99 paperwork) and your MCS certificate. Fuse then forwards these documents to the relevant DNO to request the generation of your export MPAN. It is important to note that while Fuse can assist in generating this non-energised "shell" MPAN, another supplier must energise it first before you can switch to Fuse for your export tariff. You can find more information about these unique identifiers in our guide, what is an MPAN.

Switching to Fuse for your export tariff

Once your export MPAN is generated and energised by another supplier, you can then switch to Fuse Energy to benefit from our competitive SEG rate. Fuse can switch in existing, compatible export MPANs. This process allows you to manage your energy exports efficiently and transparently, ensuring you are fairly compensated for your contribution to the grid.

Frequently asked questions about FiT and SEG

Can I still apply for the Feed-in Tariff?

No, the Feed-in Tariff (FiT) scheme closed to new applications on 31 March 2019. New microgeneration systems are no longer eligible for FiT payments.

What is an export MPAN and why do I need one?

An export MPAN (Meter Point Administration Number) is a unique identifier for your electricity export supply. You need one to track the electricity you send back to the grid and to receive payments for it under schemes like the SEG.

How long does it take to set up an SEG tariff?

The time it takes to set up an SEG tariff can vary. It depends on whether you already have an export MPAN and a smart meter capable of half-hourly readings. If you need to generate an export MPAN, this process involves your DNO and can take several weeks. Once you have an energised export MPAN and a smart meter, switching to an SEG tariff with a supplier like Fuse Energy is typically a quicker process.

What if I already have a FiT contract?

If you already have an active FiT contract, you will continue to receive payments under your original terms until the contract ends. Your payments are managed by your chosen FiT licensee. You cannot switch from FiT to SEG, as the schemes are separate.

Ready to make the most of your exported electricity? Fuse Energy offers a competitive SEG rate and supports you through the process of earning from your microgeneration system. With clear, step-by-step guidance and a commitment to transparent service, Fuse empowers you to maximise your energy independence. Signing up takes just a few minutes, so you can take control of your bills from day one. Click here to switch to Fuse Energy today and start earning.