How does the FIT scheme work?
Users of the scheme are paid out a fixed sum for each kilowatt hour (kWh) of electricity they generate, even if they use the energy themselves. Any excess electricity generated can also be sold back to the National Grid.
The rates paid out depend upon a variety of factors, such as the size of the system, the technology used to generate electricity, when the system was fitted and how energy efficient the applicant’s home or business premises is.
As part of the rules of the scheme, users had to use a MCS-certified installer to fit any new technologies.
Eligibility for the FIT scheme
The FIT scheme was open to applicants who had installed, or were interested in installing, the following technologies:
- Solar photovoltaic (solar PV)
- Wind turbines
- Micro combined heat and power (CHP)
- Hydroelectricity
- Anaerobic digestion.
The capacity was capped at two kilowatts (kW) for CHP and at five megawatts (MW) for the other forms of renewable energy.
What is the Smart Export Guarantee scheme?
Under the Smart Export Guarantee (SEG) scheme, which was launched in January 2020, licensed electricity suppliers must pay consumers for excess electricity they have generated and put back into the grid through renewable energy technologies. This scheme is open to both domestic and business electricity customers who meet the criteria.
The main difference between the SEG scheme and the FIT scheme is that the SEG scheme only pays out for the surplus electricity that is sent to the grid, whereas the FIT scheme paid out for all the electricity generated by renewable means.
What is a Smart Export Guarantee rate?
The rates paid under the SEG scheme vary from one supplier to another. There are also two main types of rates: fixed and flexible rates.
Fixed rates
With fixed rate plans, you’re paid a set amount of money for every kWh you send to the grid, no matter when you export it. The majority of the SEG tariffs available at the moment use fixed rate pricing.
Flexible rates
Under flexible rate plans, the amount you’re paid varies depending on how valuable the electricity is to the grid at different times. For example, you might find that you’re paid more at times when the demand is increased, such as in the evenings or at weekends.
How much will I save?
The amount you save on your energy bill by using the SEG scheme depends on a variety of factors, including:
- how much surplus energy you generate
- the rate paid out at the time of export (if you’re on a flexible rate)
- how much electricity you consume
- how much you pay for electricity
- how much time you spend in your home or business premises.
If you’re serious about saving money on your energy bills, it’s important to take the time to find the right deal for you by comparing energy deals for businesses and homes before committing to any one plan.
Eligibility for the SEG scheme
If you generate green electricity in Great Britain through any of the following means, you may be able to qualify for Smart Export Guarantee payments:
- Solar photovoltaic (solar PV)
- Wind turbines
- Micro combined heat and power (CHP)
- Hydroelectricity
- Anaerobic digestion.
The capacity is capped at 50kW for micro-CHP and up to 5MW for the other technologies.
In order to qualify, you will also need to ensure that your meter can provide half-hourly readings. This may mean that you will need a smart meter. However, some advanced traditional meters can also provide these readings.
You must also make sure that the systems you install are approved by the microgeneration certification scheme (MCS). The fitter who installs the system must be MCS-certified too. Products and companies that have been MCS-certified have proven that they meet the high standards required for the renewable energy market. You can learn more about the scheme here.
It should be noted that SEG payments are not issued automatically. To benefit from the scheme, you must sign up to a SEG tariff with an energy company.
Which companies offer Smart Export Guarantee tariffs?
Energy companies with in excess of 150,000 customers must offer the Smart Energy Guarantee in the UK. This means that all of the ‘Big Six’ providers offer at least one SEG tariff. However, smaller energy suppliers can sign up the scheme voluntarily so it’s worth bearing this in mind when searching for the best rates.
How we can help
Here at Utility Bidder, we make it our mission to find the best energy deal at the best price for all of our customers. If you’re looking for an electricity deal that will save you money and help you to become more sustainable, we can help. Whether you want to lower your business’ carbon footprint or simply lower those household bills, you can get in touch for accurate impartial information and advice on renewable energy and for help finding the right plan for you.
Simply fill out our contact form or call one of our friendly, helpful advisors on 0800 007 4001. We’d be delighted to help you on your way to living and doing business for less.
