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Energy explained

Daylight robbery: how we can support small-scale renewable generation

We'd like to pay people for energy they generate at home and put on to the grid. But we think the government has ended the current 'export tariff' too soon.

Yesterday the government confirmed that it will be ending the 'export tariff' for solar panels meaning that anyone who adds solar panels to their home after April 2019 won’t be paid for the excess electricity they export to the grid.

We were disappointed to hear this news for two reasons:

Firstly, because we think it’s unfair on energy users who have installed solar and are trying to do the right thing by investing in renewables. Small scale energy generators like these should be paid for the energy they contribute back to the grid.

Secondly, this emerging market of small scale, ‘individual’ generators is one we’d love to support. We want to pay people for the energy they generate. But right now, the infrastructure for doing that is not in place. So while we support the government’s intention to move to market-based solutions, we think there is a way to go before we can all get there.

Withdrawing the export tariff in the short term means the transition to that future market is going to be more difficult. We recently made this case to BEIS and we’ve included an abridged version of the advice we shared with them below. Unfortunately, they chose to make a different decision.

We’ll continue to talk to them about this and work with the industry to consider how we can all support this kind of energy generation. We’re also going to investigate whether we can create and support an export tariff of our own. It’s a complicated thing to do, so we won’t have answers soon, but we’re determined to support this community of people who are so committed to renewable energy.

Bulb chose to become a voluntary FIT licensee in April 2018. Our members can register for the Feed-in Tariff through their Bulb Account.

And as ever, we’d love to know your thoughts on this topic. Tell us what you think about the announcement or let us know any questions on the advice we gave to BEIS.

Our advice to BEIS

Bulb wants to offer an export tariff to our members who are small scale generators. We want to buy the electricity they export and pay them accordingly based on the wholesale energy price. We need smart meters to do this accurately.

We believe offering an export tariff can be economical for suppliers, but the systems are not there yet. We would pay members the wholesale energy price for the energy they generate, minus costs and allowing for a small margin. This would get better with economies of scale: the more members we sign up for the export tariff, the better deal they would receive, as our costs to implement would be spread across more members.

For Bulb to offer an export tariff, the following conditions need to be met:

  • Bulb needs to receive accurate and regular export readings (ideally half-hourly) from a smart meter installed in a member’s property, and

  • Bulb needs to be able to make sure that it can include this energy in the 'settlement' process, when we reconcile the difference between the energy we buy and the energy our members use.

Based on research Bulb has conducted in August 2018, there is no practical way we can offer this type of export tariff to our members today. Government can play an enabling role in pushing for the collaboration needed between all the energy industry players to make the market possible.

To help build this market, government should:

  • Maintain the current export tariff for a period until viable alternatives are in place.

  • Set-up an industry-wide taskforce to deliver by spring 2019 a plan to ensure that smart meter data can be recognised in the ‘settlement’ process

  • Take action to ensure smart meters can monitor export to the right standard to enable small-scale renewable export payments

  • Encourage energy suppliers to move towards offering export tariffs

  • Ensure that price comparison websites and other switching services are appropriately regulated to avoid consumer confusion

At the same time, government should continue its work to improve the regulatory landscape for storage, particularly through the Smart Systems and Flexibility Plan.