Ofgem has updated technical guidance, which has removed what has been described a “key barrier” to the residential battery storage market.
Until now, there has been confusion over whether homes that have installed solar and receive export tariffs for supplying the grid with the generated electricity, are still eligible for payments if they add battery storage and a smart meter.
“The legislation underpinning the RO and FIT schemes does not refer to or define storage or storage facilities. This means that the co-location of storage with accredited renewable generation is neither expressly prohibited nor expressly provided for under the schemes,” writes Ofgem in the new guidance document.
It continues, “However, we consider that where the requirements of the schemes continue to be met, storage can be deployed and the accreditation of RO generating stations or FIT installations can remain valid under the existing legislative framework.”
The country’s Solar Trade Association (STA) has hailed the clarification, stating that it has removed a “key barrier” to battery storage for 900,000 U.K. solar homes.
“Government has been telling the industry that they want to see battery storage market take off in the UK, but the confusion around installing battery storage with existing FIT-accredited solar has been a key barrier,” says Nick Wood, analyst at Powervault and chair of the STA’s Residential Energy Storage Working Group.
However, the association says that greater clarity would be beneficial, given that Ofgen’s explanation is “complex”.
Indeed, the document says, “It is possible that co-locating storage may impact the eligibility of an accredited RO generating station or FIT installation to receive continued support under the schemes, or may alter the amount of support received.” As such, “Generators should consider carefully the requirements of the scheme to ensure their proposed configuration does not adversely affect their ability to receive support under the schemes.”
STA is also calling for a decoupling of the smart meter roll out from the requirement to move to metered export; and the removal of 20% VAT for retrofit battery storage systems, which is much higher than the 5% VAT for new PV and storage systems
“We would like to see this deemed approach retained as an option for existing solar homes that want to install smart metering alone, until we can be confident they will not be caught up in regulatory spaghetti or potentially hidden expense,” said CEO Chris Hewett.