UK government may step in to impose minimum price for solar power sold to the grid

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The U.K.’s Solar Trade Association (STA) has welcomed publication today of the government’s Smart Export Guarantee (SEG), brought in to replace the export tariff previously paid to small scale solar generators for excess power fed into the grid, and which lapsed in April.

As anticipated by the solar trade body, the government did not announce a minimum price for solar energy exported by residential generators but did leave the door open to such a move if power companies do not provide a sufficiently competitive market for generators.

What would constitute a competitive market was not defined and the STA today stated the “one existing domestic offer linked to the wholesale price” should be regarded as the minimum requirement. The STA has previously highlighted the fixed £0.055/kWh export tariff offered by London-based Octopus Energy plus a potentially higher smart tariff offered by the same provider to generators with solar storage.

C&I left high and dry

The STA also pointed out the SEG will only apply to residential solar arrays, meaning the owners of small scale solar commercial and industrial (C&I) systems are still left without access to payments for their excess power.

Under the rules of the guarantee, energy companies with at least 150,000 retail customers must publish their payment terms for small solar generators exporting excess power to the grid from January 1 onwards. Smaller companies can do so voluntarily, as Octopus does.

The STA has pledged to maintain an online SEG league table indicating which power companies are offering the best deals for solar power exporters.

With reference to the lack of a minimum export payment price and the fact the U.K. government has been forced to cap residential energy bills since late 2018, however, STA director of advocacy and new markets Léonie Greene said: “It is a requirement under EU law to offer fair, market rate payment for small scale solar power exports and [the] government has decided to leave this to a market that it does not trust to supply power at a fair price”.