Renewables in the UK: The FIT Scheme vs. Smart Export Guarantee
Renewable energy has never been a more relevant issue. Scientists everywhere are warning us that fossil fuels and coal are doing irreparable damage to our health and society. While the planet will heal itself, we may not live to see it. With such dire circumstances, people are beginning to call on their governments to facilitate the transition into a world of clean energy. Politically speaking, however, it feels as though we aren’t moving fast enough. For example, a lot of people have shown concern that the government of the UK has taken a step backward by eliminating the feed-in tariffs (FIT) program for renewable energy producers and replacing it with the Smart Export Guarantee (SEG).
The FIT Scheme
Earlier this year the government of the United Kingdom ended the feed in tariff for small-scale renewable producers. FIT paid domestic and commercial green energy producers for the electricity they generate and for what they exported to the power grid. The Department of Business Energy, and Industrial Strategy (BEIS) decided to end the scheme, and said that the closure will allow the government to develop a system that takes into account the growth of technologies like batteries and the ever-changing energy landscape. While billed as a way to improve the energy sector, critics argue that it mitigates support for the industry.
Since 2011, FIT has facilitated the growth of the solar industry. Many see it as a key component of the vast growth in the field. With the FIT scheme, people received subsidies for producing green energy, something we need to encourage for our economy and the posterity of our civilization. Though the government has said that this closure and change will be more efficient, it will definitely encourage less people to get into the industry.
The SEG Scheme
This new Smart Export Guarantee scheme will also provide payment to those who produce renewable energy, but only for the power that they export to the grid. This makes it more difficult for small energy producers to make a living, they will need produce even more power to make money. Those who operate with solar PV systems, onshore wind turbines, anaerobic digestion, and hydropower up to 5MW are eligible for the SEG. Micro-combined heat and power, with an electrical capacity of up to 50 kW will also be eligible for a subsidy. Domestic systems would be well within these size limits, there is no limits for small producers, it’s just that they won’t be able to get as many subsidies as they would with the FIT scheme.
Technologies and installers used by homeowners must be certified under the Microgeneration Certification Scheme (MCS). Energy producers may ask you to provide these credentials to prove that the installation meets this standard. According to the site MoneyPug, which is often used to compare utilities, renewable producers must be metered with reading exports with a report every half an hour, despite whether or not they are required for the tariff. Meters must be registered. One positive about SEG is that there is not any requirement for properties to meet energy efficiency standards, but this goes with the government’s lack of concern for energy sustainability.
How Much do Producers Receive?
There are no minimum tariffs for the SEG. The only requirement is that tariffs must be greater than zero at all times. This means that energy suppliers need to decide what tariffs to offer their customers. The export tariff will likely be the largest benefit. It is clear that when the government said they wanted to make renewable energy more efficient, they meant for the state. Not for the people.
SEG vs. FIT
The FIT scheme facilitated renewable energy producers more than the SEG, which is based more on making money for the government than it is to help green energy become the mainstay of our energy system. With sustainable power being a central issue to the continued prosperity of human society, many people are still thinking with the short-term in mind. Instead of discouraging the solar industry with less advantageous subsidies, the government should be doing everything they can to support the economic growth and environment sustainability that green energy can offer.