Good news! We’re now opening our second generation Smart meter (SMETS2) installations to Members with solar panels (or any other type of renewable generation) installed at their home.
What’s driven this change?
To explain why we’re only opening this up now, we want to give a bit of a background on why we haven’t been installing SMETS2 alongside solar panels.
Most people who generate electricity at their home, with either solar panels, a wind turbine, or some other renewable generation technology, feed some amount of that electricity back onto the National Grid.
In the past, they were offered a government backed scheme called a Feed-in-Tariff (FiT). This scheme guaranteed to pay them for some or all of their generation - and ended on 31 March 2019 for new installations. Anyone signed up for FiT before that date will keep receiving payments for many years to come.
It’s fair to say there’s been a lot of uncertainty in the energy industry as a whole around FiT and how the SMETS2 rollout affects existing FiT customers.
For those of you who aren’t FiT generators, we’d like to explain the intricate regulations around FiT.
Under Feed-in-Tariff, a generator receives two types of payments from their FiT supplier:
- Generation payment — this equals the value of everything that the solar installation has generated. It doesn’t matter whether some, or all of the electricity was used by the property, or put back into the grid. Generation has its own meter and a FiT supplier would ask for a quarterly or yearly reading.
- Export payments— this payment is for excess electricity that the property hasn’t used. Instead, this excess is put back into the grid. These payments are, by default, paid on a deemed basis which is based on, typically, 50% of the total generation.
To give an example, imagine your solar panels generated 1,500 kWh of electricity in three months. Your FiT contract pays you 3p/kWh for generation and 5p/kWh for deemed export. You’d receive:
1,500 kWh (actual generation) * 3p/kWh (generation payment unit rate) + 750 kWh/2 (50% generation) * 5p (deemed export unit rate) = £82.5
The trick here is: not many UK households export as much as 50% of their generation. The actual figures are much lower (even lower if you’ve got a battery) so FiT generators are receiving a significant benefit with the deemed export payments.
Here’s where Smart meters make the difference: FiT policy says that when a meter capable of measuring export is installed at the property, deemed export should end and measured export should be introduced. Any Smart meter, including first generation (SMETS1) or second generation (SMETS2), is capable of precisely measuring export, whereas older meters aren’t. So deemed export should end, and measured export should begin, when a FiT customer has a Smart meter installed.
Ready for another conundrum? In most cases, FiT customers have different energy suppliers and FiT suppliers. 😫
So, when a Smart meter is installed, the FiT supplier may not know there’s now a meter installed in the house that can measure the exact electricity export to the grid, so they continue making generation and deemed export payments. In theory, FiT generators should always notify their FiT suppliers about a meter exchange. In real life, not many generators know that’s the case.
This has been a broadly recognised problem in the electricity industry. To avoid contributing to it, we’d suppressed SMETS2 installations to FiT generators while we asked for guidance from the regulator on how to move forward - we’ve got this guidance now.
If you’re a FiT generator…
We’ve been advised by the regulator that the principles of SMETS2 rollout should always stand above our concerns around FiT policy. There’s work being done to enable information about a meter exchange reaching the FiT supplier shortly after installation.
For now, we need to highlight that if you’re receiving FiT payments, you'll need to inform your FiT supplier once the Smart meter has been installed. Magnum will confirm this with you when booking your installation.
If you’re not a FiT generator…
If you installed your solar panels after 31 March 2019, then Feed-in-Tariff isn’t available for you. Once your SMETS2 has been installed, you can sign up for measured export payments under the new Smart Export Guarantee (SEG).
A number of larger suppliers launched their SEG tariffs on 1 January. You don’t need to be on supply with them to sign up for their export - just look around and find the best solution for you! We’ll be joining the group of SEG suppliers in 2021.👍
Thanks for your patience.🙂 If you have any questions let’s chat about them in the replies below!