The Feed-in Tariff is Finished. Now what?
Launched in 2010, the Government’s Feed-in Tariff (FiT) was a model that encouraged and enabled homes and businesses to generate their own renewable electricity. Solar cells generating power, feeding green energy into the grid. Small-scale, localised and, when it comes to tackling climate change, incredibly powerful. And yet, as of Sunday 31stMarch 2019, the Government is pulling the plug on FiT.
The Feed-in Tariff scheme was a literal power shift. An energy network transformed from 100 generators, owned by industry behemoths and mostly burning fossil fuels, to 800,000 localised solar power sources. With a capacity of 6.5GW – enough energy for 2.3 million homes.
A huge contributor to Britain’s massive carbon reduction, the 759,000 sub-4kw typical rooftop solar installations alone will save 771,646 tonnes of carbon per year — the equivalent of the carbon captured by 1.38 billion trees annually.
FiT made small-scale generation, big.
Too big too fast, however. The initially high tariffs solar panel owners were paid coincided with a dropping in cost of installing solar. This led to rapid uptake that gave the Government cold feet. Cue tariff payment cuts. At launch, self-generators enjoyed 40p per kWH; today it’s 5p.
With the Feed-in Tariff in its final throes, energy minister Claire Perry has asked what should replace it, with her department taking industry views on its proposed substitute, the Smart Export Guarantee.
Another acronym for us all, SEG forces large suppliers to pay households and businesses for exporting their power. The export must be ‘smart’, meaning measured accurately through a smart meter. However, it is safe to say that Smart Export Guarantee is not warming up on the side lines, ready to take FiT’s place on the pitch. It’s not even on the bench.
Two immediate problems. First, timing — the SEG will not be in place by April, when FiT comes to an end. So, a gap with no structured support for small scale renewables. Solar installations will drop off a cliff, not just denting Britain’s ability to curb climate change but also stymying the emerging renewables industry – manufacturing, installation and servicing.
Second, so-called smart. Smart meters in most homes today are of the SMETS1 design. They’re incapable of metering export — not so smart. SMETS2 meters are capable, theoretically, but their roll-out has faced multiple delays. The ability to measure export is still not available and government has paid little attention to rectifying the problem.
However, more fundamentally, why focus on export at all? The shorter distance electricity has to travel, the greener it is. A clean, intelligent, localised power grid should not prioritise export.
So, what is the SEG designed for? It is certainly not here to accelerate the growth of renewables. In fact, the Department for BEIS has stated explicitly that it is not.
SEG is a PR placeholder. A pin stuck in small scale solar. So fracking and slow, expensive nuclear deployment can continue.
Insane when you consider that the heat is on to address climate change. This is an opportunity to get to a cleaner energy system faster.
Changing technologies and changing behaviours require us to see energy differently. Old world energy is big power station to small consumer. New world energy is localised and self-sufficient, generating and using your own power in your own home. It cuts carbon and it cuts costs.
Yes, solar has its challenges. It’s most productive in summer and during the day whilst people are at work. But fast developing technologies — storage batteries, truly smart metering, electric vehicles — solve those problems.
FiT worked because it provided a fixed return, giving households – and banks – the certainty to invest in uncertain technology. Now the technology is tried and tested. It is the moment for the government, and financial institutions, to understand a world of localised energy and its value. The energy source is ready to go subsidy free, but a patient finance is required to support households with the upfront investment – a ‘help to buy’ for solar.
Less than three per cent of homes generate their own renewable power today, yet their total capacity is double our largest power station. Imagine if it was 10, 20 or even more. Costs are still falling, the technology is available and the need to address climate change ever more pressing.
We need a clean power grid that is designed for the UK’s 66 million people, not just a few big energy companies.
