Community Energy England (CEE) – the organisation representing community energy businesses including co-ops – has responded to government proposals for a replacement for the Feed in Tariff (FiT).
FiT, which pays domestic and commercial green energy producers for the electricity they generate and export to the grid, runs out on 31 March.
The Department for Business, Energy & Industrial Strategy (BEIS) is seeking views on the introduction of the Smart Export Guarantee (SEG) – a mandatory supplier-led route to market for small-scale low-carbon generation. Under the SEG, suppliers would determine the tariff per kWh for remuneration and the length of the contract with green energy generators.
In a statement, Community Energy England said: “CEE, alongside other organisations such as the Solar Trade Association, 10:10 and Regen, has been calling for the reinstatement of an export tariff, so we welcome the government’s proposals to ensure that small-scale generators are paid for their contributions to the system. However, an initial read-through of the document has raised some areas for concern.
“It is not clear whether generators will receive a fair market price for their exported electricity, with the consultation only proposing that tariffs must be greater than zero. Contract lengths agreed by suppliers may also vary, making it difficult for community organisations to develop financial models or secure finance.
“Without additional support mechanisms for community energy, the continued focus on market-based solutions will significantly increase the risk and reduce margins for many community-led projects. The proposed SEG is also heavily dependent on the effectiveness of smart meters.
“The consultation doesn’t give a timetable for implementation and there will be no retrospective payments. Best case scenario for implementation of the SEG would be Autumn, but 12 months is more likely. There will therefore be a significant period from the FiT closing from 31 March whereby projects not registered in time for FiT scheme will receive no payments for exported electricity.
“CEE has called on members to submit their views to feed into the response that it will submit to BEIS.”