Do you own a small wind turbine? Or perhaps you’re looking to install your first solar PV panels? You may have some extra renewable power to sell!
If that’s the case, you should consider all the options available to you to sell excess renewable energy and get the most money back for it. The options available to you may include a power purchase agreement (PPAs), a direct wire or on-site usage.
In this blog post, learn about how to sell export power from small-scale renewable energy installations.
Can I sell excess electricity to the grid?
If your asset is connected to the grid, then the simple answer is yes – you can sell any surplus power you generate back to the grid with the help of your existing import (domestic supply) supplier or by arranging an export power deal with a different supplier (various rates can be offered by different suppliers). This is a great way to earn some extra income.
Getting started selling export power from small-scale renewable installations
Securing a power purchase agreement is increasingly challenging for smaller asset owners, so in this post we explore the options available to you if you own or manage a small-scale installation. For more general information on securing PPAs, check out our blog series: Your guide to PPAs.
An important first step is understanding some of the key terminology.
An asset’s capacity is the maximum output of electricity a generator can produce under the ideal conditions (measured in kW or MW). You may come across terms such as the total installed capacity (TIC) & the export capacity (or DNC). The latter tends to be equal or less than the TIC, as it’s the amount exported from the asset. Generation volume refers to the amount of electricity produced over a specific period of time, typically 12-months (measured in kWh or MWh). Do you know what your asset’s installed capacity is and what its export capacity is? Do you know what generation volume you can expect from your site?
Another key step is understanding your metering system. A power meter is used to record the generation volume of your site and, where applicable, the consumption associated with it, too. There are two types of metering systems: half hourly or non-half hourly metered. A half hourly meter, as its name suggests, will register readings every 30 minutes, giving you a better view of your power export & consumption. These readings can be taken automatically and recorded online. Where a non-half hourly meter is installed, you may need to take monthly readings manually instead.
If you set up a half hourly meter, you will also need to arrange contracts with a Data Collector (DC) and a Meter Operator (MOP). You can get these from your current supplier, however it’s always best to shop around to ensure you’re getting the best deal. Your MOP will be responsible for the installation and maintenance of your meter and ensuring the data can be sent to the DC. The DC then sends the data to your contracted supplier.
How to determine if your installation is half-hourly metered? Typically, if your site has a DNC above 30kW, it is half hourly metered. To check, look at a previous energy bill: if the number on the top left (to the right of the S) is 00, then you have a half hourly metre.
So what are my options for selling export power?
If you’d like to sell your export power to the grid, look for a utility power purchase agreement. For small-scale installations, the best thing is to get quotes directly from suppliers, and we always suggest getting as many quotes as possible for a good comparison. Some suppliers are more interested in certain technologies or asset sizes. Get in touch with us for more information and for further advice.
Another option for you is to take advantage of the subsidy schemes: go back onto the FiT if your site has been approved on the scheme before or the SEG if your asset is new – you can apply for the subsidies whether your installation is half hourly metered or not. More on government support schemes below.
Alternatively, you can use your power on-site or sell it to a local institution looking for power through a private wire. You could also look into an on-site battery system or alternative ways to generate renewable energy.
Government support schemes for small-scale renewables
The UK Government is supportive of the growth of renewable energy and so introduced support schemes for small-scale renewable generation assets. It is also good to know which schemes are available to you. For smaller installations, there are two schemes currently operational: the Feed-in-Tariff (FiT) & the Smart Export Guarantee (SEG) schemes.
The FiT support scheme is no longer available for new applications. But if you’re already signed up to it, you should know that it has two elements: the FiT export and the FiT generation payments. They are independent and can be arranged with two different suppliers.
You’re always entitled to FiT generation payments – you get these for generating renewable energy. As for the FiT export element, it’s a payment for the power you export to the grid (rather than using it on your premises). The rate of it is adjusted every financial year in line with the Retail Price Index (RPI). For small half hourly metered installations, receiving a FiT export payment is an alternative to signing a PPA. You can switch between a FiT export payment and a PPA when your contract ends. Over the past year, PPA prices have been significantly higher than the FiT export payment rate. However, FiT export rate still remains an option and may become more favourable if prices drop. More details on the FiT scheme and requirements here.
The SEG scheme was launched in 2020 to replace the FiT. Small solar PV, wind, micro-CHP, hydro and AD sites meeting eligibility criteria can benefit from using the SEG scheme. With this form of support, generators receive a fixed rate of payment for the electricity they export to the grid. Licensed electricity suppliers signed up to the scheme (called SEG licensees) are required to offer a tariff to any eligible generator. You can read more about the SEG scheme here.
Is it worth selling excess power to the grid?
Yes, if your site is generating power that you don’t use, it is definitely worth looking into selling it. The best option for you may change as the power prices change, the support scheme options differ and so on. It’s important that you review your contracts and the options available to you for selling surplus power regularly to make sure you maximise your income.
Using the Renewable Exchange platform for a small-scale project
Now you may be thinking, when can I get onto the Renewable Exchange platform? If you’re a small-scale generator, the platform may not be your best option.
At Renewable Exchange, to provide the best possible service we tender sites generating at least 1,000 MWh in a year (or 1,000,000 kWh). The platform ensures a highly competitive process and creates a system which helps suppliers bid on large-scale sites with added complexity or portfolio tenders with multiple sites and various technologies all bound together.
When it comes to small-scale installations, the process is much simpler and suppliers prefer to quote directly. They often have independent teams that deal with larger assets through the Renewable Exchange platform and small-scale sites directly.
Some generators in this situation have decided to increase their generation output, either by expanding the asset (ie. adding more solar PV panels) or by decreasing the on-site usage. If that’s a possibility for you, it may be worth exploring!
Regardless, our mission has been to support the growth of renewables – no matter the size! If your site is below our threshold and the above options aren’t working, email us at [email protected]. For market updates, follow us on LinkedIn & sign up to our newsletter!
Written by Vivian Baliozian – PPA Executive at Renewable Exchange.