When Good Energy launched HomeGen in 2004 it was for a simple reason. To provide people with a model for producing their own power. We had plenty of customers telling us they wanted to do so, and we knew people power had a huge role to play in cleaning up our energy system. We just needed to make it stack up financially.
HomeGen was how we did just that. It then became the blueprint for the Feed-in Tariff, the scheme through which over 800,000 installations would register to receive payment for the energy they share back to the grid.
Today there is over 6GW of installed capacity on the register. A good chunk more than the UK’s largest single power station, and enough to meet the electricity needs of a small country like Guatemala. Really puts the emphasis on ‘scale’ in ‘small-scale generation’ put like that, doesn’t it?
Yet, as widely publicised, FiT is coming to a close. The final blow from the government came on the same day in December as the Targeted Charging Review (TCR). Designed with the very valid purpose of addressing how charges work in a decentralised energy future, it confirmed that not only would homes and businesses generating their own power no longer be paid for sharing it, they would be charged for the privilege.
Closure of the Feed-in Tariff is just one part of a systemic undermining of small-scale self-generation by government and regulator. FiT rates have steadily declined, but even outside of that as far back as 2015 we have seen a chipping away elsewhere. There was the removal of levy exemption certificates for renewables, creating the bizarre scenario of a carbon tax on zero carbon energy sources. Changes to network access, business rates and the deep cuts to small generator’s Triad payments implemented last year. Line it all up with what we are facing now with the TCR, the continued heel dragging on an export capable smart meter solution and anyone would think we are trying to make it harder for people to generate and share their own power, not easier.
Since the closure announcement the supposed replacement to FiT, the Smart Export Guarantee, has been welcomed. But set it in broader context, it feels like one step forward after 20 steps back.
It is presumably not a deliberate thumb on the scales, tipping them towards large scale gas and nuclear. The government speaks loudly and often about encouraging a smart, decentralised and decarbonised grid. But the implementation is embedded with some assumptive ‘old world’ thinking: that there are generators, and there are consumers. Two separate things.
When considering the future, we need our government to recognise a new type of consumer as we seek to lower bills. The big assumption historically is that the ‘consumer’ is passive in the energy system. That they are not generators and not responsive to change. What we have found is that solar panels and lowering bills go hand in hand. Why not embrace that, and find a way to deliver those benefits for more people, rather than fewer?
In all the hubbub about paying people for their exported solar power, it seems to have been forgotten that the greatest value for small-scale generators is behind the meter. A kWh off your monthly bill is worth more than one exported to the grid. As it should be — the shorter the distance power has to travel, the greater its value.
As the UK’s second biggest FiT administrator, we speak to customers every day who are evidence of this. We know that more often than not, environmental impact is these customers’ first motivator, not financial benefit. We also know that a vast number of solar PV systems are not self-funded installations on the roofs of well-off homeowners hoping for a healthy return whilst they cut their carbon. They are the part of housing association managed schemes, frequently providing a route to combating fuel poverty. Those homes are generally low-usage, and as such would be disproportionately impacted by a fixed charge such as proposed in the Targeted Charging Review.
Energy is joining the sharing economy. So of course we need to rethink how grid charging works for that future. But that requires joined up, forward thinking. In a sharing economy you don’t just have ‘consumers’ who must be protected, and ‘generators’ looking to make a buck. You have a democratised system built for the 66 million people in it. Not a top down system trying to encourage just a few to invest.