What Grants Are Available for Solar Panels?

The Domestic Renewable Heating Incentive (RHI) will be coming to an end 31st March 2022, sadly also ending any available funding for thermal solar panels. This means remaining benefit for solar panel owners comes in the form of the Smart Export Guarantee (SEG) for photovoltaic (PV) solar panels only, which replaced the Feed-In Tariff (FIT) Scheme in January 2020.

If you’re tempted by the idea of installing your own panels, have a read of our article explaining the process here. Solar panel prices have dropped by 25% since 2014, and with the continuing volatility of the fossil fuel market it’s a great time to make the investment.

What is On Offer?

The SEG ensures a tariff payment from certain energy companies called SEG licensees for small-scale generators of low carbon electricity that they do not want or need, and therefore export back to the national grid. In other words, if you produce renewable energy that you don’t need and send back into the national grid, you’ll be paid for it, as long as you are signed up with a SEG licensee.

The SEG does not specify a rate for the tariff paid, only that the amount must be above zero, and for this reason it is worth exploring the market to see which SEG licensees are offering the best rates. Between 2020 and 2022, Octopus Energy increased its SEG tariff from 5.5p/kWh to a market topping 7.5p/kWh, indicating market competition is doing its job in raising the rates on offer.

Each year SEG licensees must renew their status with ofgem, and a helpful list of current SEG licensees can be found on the ofgem website. Worth noting, your SEG licensee does not have to be the same company as your electricity and/or gas supplier. Separate or same companies can be used for each. SEG licensees also decide the contract type, length and payment frequency tariff offering.

Am I Eligible?

  • The SEG is available for low-carbon electricity produced from PV solar panels with a total installed capacity up to 5MW
    • It also covers energy produced from wind, hydro, anaerobic digestion and micro-combined heat and power (eligibility criteria may vary for these different sources)
  • Suitable certification of either the installation or installer will need to be provided – such as a Microgeneration Certification Scheme (MSC) certificate. Your SEG licensee will give you with details of what exactly they require
    • Without certification, you SEG licensee is under no obligation to offer you payment, although in some cases may do so anyway
  • An export meter with an export meter administration number (MPAN) is also required
    • Your export meter must have an export administration number (MPAN) – this is different to the import MPAN that you’ll notice on your electricity bills
      • Your SEG licensee should be able to provide you with an export MPAN
    • The meter must be capable of taking half-hourly measurements (most are)
    • Your existing meter may well be capable of measuring exported electricity; you can speak to your SEG licensee can help you with checking this out
  • You may only receive SEG payments from one SEG licensee
  • If you receive FIT scheme payments for your exported electricity, you are not eligible
    • If you are lucky enough to already be a FIT scheme participant, we’d also recommend staying with that for as long as you can; it is a far more generous scheme than SEG
  • Payments from the RHI scheme, however will not affect your eligibility in any way

How Can I Apply?

  • Applications should be submitted directly to your chosen SEG licensee. This will be reviewed before eligibility is confirmed and a tariff is offered

What Should I Be Aware Of?

We try to cover the most important bits you should be aware of, but we would always recommend referring to the ofgem website for full guidance on the scheme before you apply.

SEG licensees may have additional conditions for their more advantageous tariffs; for example Octopus offer a variable tariff that effectively buys your energy at when prices are highest, potentially earning you over 50% more than a fixed rate tariff, but a form of battery storage for your solar panel is therefore required. For this reason, it really is worth researching the market to find a tariff that works best for your installation.

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