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Government proposes to end payments for surplus solar energy

Critics have warned that stopping export tarrifs “is grossly unfair” and would mean small producers would be giving away energy for free.

By Sam Forsdick

Solar energy industry leaders have urged the Department of Energy and Climate Change to continue payments to small producers for their excess solar energy.

Currently, any overspill energy from individual users of solar panels can be sold to the National Grid at a price of 5.24p per kWh. It is one of several incentives to encourage households, small businesses and farmers to invest in the reusable energy source. However, this incentive now risks being taken away as part of the government’s plans to scrap export and feed-in tariffs.

The Solar Trade Association, which represents the solar industry, regards this as a threat to consumers and describes it as an end to fair payments for solar power from UK homes. Leonie Greene, director of advocacy and new markets at the STA, said: “It’s withdrawing a fair payment for a valuable commodity from small-scale solar power producers. There is a gross level of unfairness in what the government are mooting and it isn’t acceptable.”

On average, only 50 per cent of energy generated from solar panels is used by small-scale solar power producers. The remainder can be exported to the public networks and the STA believes that small-scale producers should be properly paid for any contributions they make to the national grid.

Greene added: “It could be very damaging for public engagement in clean energy and climate change and will also set back the development of the smart power industry in the UK. It’s a massive own goal and indefensible set of policies.”

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Due to the small amount that the solar energy surplus contributes the change will have little to no effect on energy prices but could have a much larger impact on take-up of the renewable energy source, Greene warned. Deployment of solar in the UK has fallen by 95 per cent in 2018 compared to 2015 following the removal of subsidies for solar power.

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The STA argues for more consideration of the economics of solar across the board and hope that the government decides to reinstate these payments when it publishes its plans next April. Without this assurance small generators of solar power may be forced to export their excess energy onto the grid for free – a move they say will “effectively be subsidising the big players in the power industry”.  

These concerns are listed in an open letter to the Minister of State for Business, Energy and Industrial Strategy, Claire Perry. Major suppliers, such as E.ON and Ovo Energy, are amongst the 200 signatories as well as Howard Johns, chair of the 10:10 charity and Philip Wolfe MBE, one of the pioneers of the British renewable energy sector. 

The government’s proposal follows revisions to the EU Renewable Energy Directive which enshrines in law the right of citizens to produce, consume, sell and store renewable energy.  James Watson, chief executive of SolarPower Europe said: “We are astonished that the UK could propose ending payments to householders for their clean power just as Europe moves to secure the rights of all its citizens to fair payment. Such poor treatment of British small scale energy consumers will harm public engagement in solar, at a time when we need to increase the uptake of clean energies, and will put the UK public at a huge disadvantage compared to other EU countries.”