Feed-in Tariff and Smart Export Guarantee explained

The Feed-in Tariff (FiT) scheme, designed to promote renewable and low-carbon electricity generation, closed to new applications on 31 March 2019. While existing FiT agreements continue to receive payments, the Smart Export Guarantee (SEG) was introduced on 1 January 2020 as its replacement. The SEG requires licensed electricity suppliers to offer tariffs for electricity exported to the grid from small-scale low-carbon generators. Understanding the differences between these schemes and how to maximise earnings from your exported energy is key for homeowners.

If you're generating your own electricity and looking to earn from your surplus, Fuse Energy offers a competitive SEG rate. We make it simple to get paid for the clean energy you send back to the grid. Click here to start earning with Fuse Energy.

Understanding the Feed-in Tariff (FiT) scheme

The Feed-in Tariff (FiT) scheme was a government initiative launched in April 2010 to encourage the uptake of renewable electricity generation in Great Britain. It provided financial incentives to individuals and organisations that generated their own electricity from eligible renewable sources.

What was the Feed-in Tariff?

The FiT scheme compelled energy suppliers to make payments to households and businesses for the renewable electricity they generated and, in some cases, exported to the grid. The scheme covered technologies such as solar photovoltaic (PV), wind turbines, hydroelectric systems, anaerobic digestion, and micro combined heat and power (micro-CHP).

Key features of the FiT scheme

The FiT scheme offered two main types of payments:

• Generation tariff: This was a payment for every unit of electricity generated by an accredited renewable system, regardless of whether it was used on-site or exported. Rates were set by the government and depended on factors like the technology type, capacity, and the date of installation.
• Export tariff: This provided an additional payment for any surplus electricity that was exported back to the National Grid. For installations with a capacity of 30 kilowatts or less, if an export meter was not fitted, payments were often "deemed" (estimated as a percentage of the generation meter reading) rather than based on actual export readings.

FiT payments were typically guaranteed for 10 to 25 years, depending on the technology and installation date, and were adjusted annually for inflation. Ofgem administered the scheme, ensuring suppliers complied with its requirements.

FiT closure and the Smart Export Guarantee (SEG)

The landscape for new renewable energy installations changed significantly with the closure of the FiT scheme.

When did the Feed-in Tariff close?

The Feed-in Tariff scheme closed to new applications on 31 March 2019. This means that any renewable energy system installed after this date is not eligible for FiT payments. The closure aimed to reduce costs and reflect the significant drop in the price of solar technology, which made the scheme less necessary as a financial incentive.

Introducing the Smart Export Guarantee (SEG)

The SEG was introduced on 1 January 2020 as the successor to the FiT scheme. It is a government-backed initiative that requires licensed electricity suppliers with 150,000 or more domestic electricity customers to offer at least one export tariff. These suppliers must pay small-scale generators for the low-carbon electricity they export to the National Grid. Smaller suppliers can also offer SEG tariffs voluntarily.

How SEG differs from FiT

The key differences between FiT and SEG are:

• Payments: FiT offered both a generation tariff (for all electricity produced) and an export tariff (for exported electricity). SEG, however, only pays for the electricity exported to the grid.
• Rates: FiT rates were set by the government and guaranteed for a long period. Under SEG, energy suppliers set their own export rates, which must be above zero, leading to a competitive market. This means you can shop around for the best SEG tariff.
• Metering: SEG payments are based on actual export meter readings, typically requiring a smart meter capable of providing half-hourly data. This contrasts with the "deemed" export payments often used under FiT for smaller systems without an export meter.
• Eligibility: While both schemes support similar renewable technologies (solar PV, wind, hydro, anaerobic digestion, micro-CHP), SEG generally requires the installation to be certified under the Microgeneration Certification Scheme (MCS) or an equivalent standard.

Managing your existing FiT agreement

If you applied for the FiT scheme before its closure, your existing agreement remains valid.

What happens if you have an active FiT contract?

Homeowners with existing FiT agreements continue to receive payments for the duration of their contract, which can be up to 25 years. These payments are made by your FiT licensee (energy supplier) based on meter readings you submit. The rates are adjusted annually for inflation, typically in April. The UK government has confirmed that support will be provided to these generators until 2043.

Switching energy suppliers with an existing FiT

You can still switch your energy supplier (for your import electricity and gas) even if you have an active FiT agreement. Your FiT payments are regulated by Ofgem, so switching your import energy supplier will not affect the rates or payments you receive from your FiT licensee. However, it's important to ensure your new import supplier can manage your FiT account or that you understand how your FiT payments will continue. Your FiT licensee does not need to be the same company as your import energy supplier.

Considering a switch from FiT to SEG

For most homeowners with an active FiT agreement, remaining on FiT is usually the most financially beneficial option, as FiT often provides higher generation and export payments than current SEG rates. However, if your FiT export rate is significantly lower than competitive SEG rates, or if you are not receiving an export tariff under FiT, it might be worth exploring SEG options. You cannot receive a SEG tariff if you are already receiving export payments under the FiT scheme. It is crucial to compare your current FiT payments against potential SEG earnings before making any decision.

Getting paid for exported energy with SEG

The SEG offers a clear pathway for homeowners to earn from their surplus renewable energy.

Eligibility for the Smart Export Guarantee

To be eligible for SEG payments, your renewable energy installation must meet certain criteria:

• Technology: Eligible technologies include solar PV, wind, hydro, anaerobic digestion, and micro-CHP.
• Capacity: The system must have a total installed capacity of up to 5 megawatts (MW), or up to 50 kilowatts (kW) for micro-CHP.
• Certification: Your installation and installer must be certified through the MCS or an equivalent scheme. This ensures quality and safety standards are met.
• Metering: You need a smart meter capable of providing half-hourly export readings to accurately measure the electricity you export.

The importance of an export MPAN

An export Meter Point Administration Number (MPAN) is a unique 13-digit number that identifies your electricity export supply point. It is distinct from your import MPAN, which tracks the electricity you use from the grid. Without an export MPAN, any surplus electricity you generate and send to the grid is essentially given away for free, as there's no way to attribute and pay for it. It is crucial for unlocking SEG payments.

How to obtain an export MPAN

If you have an existing export MPAN, it should be listed on your export tariff documents or within your energy supplier's online account. If you don't have one, or if you're unsure, your energy supplier should be able to help you obtain one.

To generate an export MPAN, you typically need to provide your DNO with two key documents:

1. DNO connection approval: This is the commissioning or connection paperwork, often referred to as G98 or G99 certification. G98 covers smaller microgeneration systems (up to 3.68 kW per phase), where you notify the DNO after connection. G99 covers larger systems that require DNO approval before connection. Your installer is responsible for providing this documentation.
2. MCS certificate: This proves your system was installed by a certified professional to UK quality and safety standards. Your installer should issue this certificate within ten working days of installation.

Once these documents are submitted, your DNO will create your export MPAN. This process typically takes a few weeks, often between one to four weeks, but can sometimes be longer.

Applying for the Smart Export Guarantee with Fuse Energy

Fuse Energy simplifies the process of getting paid for your exported renewable energy, offering a competitive tariff and dedicated support.

Fuse Energy's competitive SEG tariff

Fuse Energy offers a competitive SEG rate of 13p per kWh for exported electricity from MCS-certified installations. This rate is paid for every kilowatt-hour you send back to the grid. Fuse's SEG tariff is variable and reviewed quarterly, but will always remain above 0p per kWh, in line with SEG rules. This competitive rate is available to all eligible customers, including those who buy their import electricity from another supplier.

How Fuse assists with export MPAN generation

Fuse Energy understands that obtaining an export MPAN can seem complex. If you don't have an export MPAN, Fuse can assist you through the process. 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 facilitate the generation of your export MPAN.

It's important to note that while Fuse can help generate the export MPAN as a non-energised "shell," Fuse cannot energise it directly. You will need to switch in with another supplier for export first, who will energise the MPAN, and then you can switch to Fuse to benefit from its competitive rate. Fuse only switches in compatible existing export MPANs.

Switching to Fuse for your SEG payments

Switching to Fuse Energy for your SEG payments is straightforward once you have an energised export MPAN. Fuse's transparent app allows you to track your energy usage, giving you clear visibility of your earnings. Additionally, Fuse Energy provides 24/7 human customer support to help you navigate any complexities with export tariffs and optimise your income from selling electricity back to the grid. Choosing Fuse means maximising your renewable energy earnings with practical support and a clear, competitive rate.

Ready to make the most of your exported energy? Fuse Energy offers a straightforward way to get paid for the clean electricity you generate. With competitive rates and support for MPAN generation, we make it easy to switch and start earning. Discover more about our mission to power a sustainable future here, or click here to switch to Fuse Energy today.