UK government floats market-driven replacement for solar payments

Facebook
Twitter
LinkedIn
Reddit
Email

The UK's Department for Business, Energy and Industrial Strategy has unveiled a new ‘Smart Export Guarantee’ to replace the export tariff.

The country's feed-in tariff, paid for every kWh generated, and the export tariff that remunerated people for the excess power transferred to the grid, both close on 31 March this year.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

A row broke out last year over how, and indeed if, that excess power would be paid for.

Proposals unveiled by the department this morning detail how the guarantee would work in practice, legislating that all large energy suppliers will have to remunerate small-scale generators for the electricity they export to the grid.

The guarantee would see all large energy suppliers – determined as those with more than 250,000 customers – offer generators a price per kilowatt hour for exported electricity.

The government intends to leave these prices down to the suppliers themselves, however, all tariffs must be greater than zero and suppliers will not be eligible to recover costs by charging consumers at times of negative pricing.

Large suppliers will be forced to offer at least one tariff, however, they will determine the length of any contracts.

Small suppliers will be able to voluntarily join the mechanism but will be held against the same operational requirements as large suppliers.

In addition, the government has decided that all exports must be metered rather than deemed, meaning that only households with smart meters installed will be eligible for the Smart Export Guarantee.

The response

The consultation has launched now and is to remain open to responses until 5 March 2019. The full consultation document can be read here.

And responses to the government can be made online here.

Alternatively, they can tariff to [email protected].

So far, the proposals have been met with a cautious welcome from the industry. Chris Hewett, chief executive at the Solar Trade Association, said the trade body was pleased that the government was unequivocal in its view that generators should be compensated for the power they export, but pointed towards the need for that remuneration to be at a fair market rate.

“Positively, the government again identifies the System Sell Price as accurately reflecting the market value of power spilled to the grid. However, the consultation acknowledges many of the market barriers we have raised with government and the associated costs.

“, that these may impede the ability of suppliers to offer fair and meaningful rates, even though they may wish to. Customers are freely able to switch suppliers in a competitive market so where these costs fall remains vital to developing meaningful offers,” he said.

James Court, director of policy and external affairs at the Renewable Energy Association, meanwhile said the proposals could “usher in a new era” for small-scale renewables.

“It was clear that no-one should be asked to give away electricity for free, and we strongly advocated for a market-based solution and are pleased this approach has been adopted. Whilst the details around the transition from the former subsidy scheme will be important, this signal of support for the sector from Government will help our members continue to provide smarter, cleaner and cheaper electricity in the decade to come.”

However, Rebecca Long Bailey, Labour’s shadow business secretary, focused very much on the hiatus period between the FiT and the SEG, describing it as a “new mountain for small scale renewable energy to climb”.

“Rather than a simple flat payment for energy exported to the grid, the government is proposing a hugely complex market mechanism in which large energy companies – notorious for overcharging consumers billions of pounds – can offer whatever sum they deem fit to households. Furthermore, participation relies on possession of a smart meter which, due to the Government’s bungled delivery of the smart meter programme, many households will not have for some time.

“Such a complex scheme will only be accessible to those with the time and resources to negotiate it. Labour plans to roll out solar on the scale necessary to tackle climate change whereas this appears to be a blueprint for hobbyists, condemning solar power to the status of niche industry,” she said.

2 December 2025
Málaga, Spain
Understanding PV module supply to the European market in 2026. PV ModuleTech Europe 2025 is a two-day conference that tackles these challenges directly, with an agenda that addresses all aspects of module supplier selection; product availability, technology offerings, traceability of supply-chain, factory auditing, module testing and reliability, and company bankability.
10 March 2026
Frankfurt, Germany
The conference will gather the key stakeholders from PV manufacturing, equipment/materials, policy-making and strategy, capital equipment investment and all interested downstream channels and third-party entities. The goal is simple: to map out PV manufacturing out to 2030 and beyond.

Read Next

July 10, 2025
German renewables company BayWa r.e. has secured a €3 billion (US$3.5 billion) loan for 'operational initiatives and pipeline expansion.'
July 10, 2025
Copenhagen Energy has partnered with Thy-Mors Energi to set up a 100MW PV and BESS project in Ballerum, about 370km from Copenhagen. 
July 9, 2025
Many European countries generated record levels of solar power in the first half of 2025, according to figures from Fraunhofer ISE.
July 8, 2025
Germany could install 500GW of new solar agrivoltaics (agriPV) capacity on its most 'suitable' land, according to Fraunhofer ISE.
July 8, 2025
German solar glass manufacturer Glasmanufaktur Brandenburg (GMB) has filed for insolvency after posting monthly losses of €900,000 this year.
July 8, 2025
Energy consultancy JMK Research has forecast 28.3GW of utility-scale and residential solar PV to be installed in India during fiscal year 2026.

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 22, 2025
Bilbao, Spain
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK