Ofgem Clarifies Payments for Householder’s Solar Energy Exports and Storage

TECHNICAL GUIDANCE by Ofgem has been released, clarifying the treatment of existing payments for homes that currently export solar energy to the grid and that want to install battery storage and smart meters.

The clarification is good news for existing solar homes looking to invest in battery storage alongside a smart meter because it means they will continue to be eligible to keep their payments for their solar exports.

Nick Wood, Chair of the Solar Trade Association’s (STA) Residential Energy Storage Working Group, said, “It’s good news that Ofgem has listened and made the right decision to help unlock the retrofit market. This now means that the domestic battery storage industry in the UK can install batteries and smart meters in existing solar homes with confidence that deemed export payments, which are valued by solar home owners, are safe.”

The clarification on the treatment of battery storage installed alongside existing FIT-accredited solar has taken over a year.

Solar Energy Exports and Storage

The nascent UK domestic battery storage market had been impeded by confusion because of two conflicting pieces of official guidance, one of which required solar homes installing smart meters to switch to export metering and therefore lose their deeming.

The other official guidance inhibited homes from receiving payment for their metered export where they had installed battery storage, because of the risk of rewarding power drawn from the grid, not directly from the solar installation. The conflicting guidance and resulting confusion had therefore discouraged solar homeowners from installing battery storage and smart meters.

The STA is confident that the updated configurations will mean that, in practice, where a domestic customer already has FIT-accredited solar and wishes to install battery storage behind a smart meter, they can now retain their deemed export payments provided that the usual requirements are met.

The STA has said it wants to see the smart meter roll-out temporarily decoupled from the requirement to move to metered export while complex regulatory and administration barriers are removed and half hourly settlement is rolled out. Complications can arise for solar homes that install a smart meter with the push to metered export payments, a requirement which in the view of the STA should therefore not yet be enforced.

STA CEO, Chris Hewett, said, “Credit to Ofgem for listening and for doing the right thing here to get domestic smart homes moving forwards. We now need Government to remove the much higher 20% VAT for retrofit battery storage systems, compared to 5% VAT for new PV and storage system, to really boost this market.

“We would like to see this deemed approach retained as an option for existing solar homes that want to install smart metering alone, until we can be confident they will not be caught up in regulatory spaghetti or potentially hidden expense.”

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