Many farmers and landowners who have invested in renewable technology are missing out on extra revenue by failing to capture the value of exported energy, says chartered surveyor Richard Adams.
The need to maximise income and capital value should be a key component in the planning of any renewable generator, making the export element an increasingly important part of the overall scheme.
To avoid delaying access to income which should be theirs, says Mr Adams, farmers and landowners should consider the following points:
To get the best value from any generator supported by the Feed-in Tariffs (FiTs) the main aim has to be to use as much of the generated energy as possible – this results in import savings which, along with the FiTs income for generation, will improve overall return.
Don’t forget the exported element – there will always be energy left over which will spill into the grid for free unless positive steps are taken to capture the income it attracts.
Make export arrangements early during the installation phase.
Below 30kWp it is possible to take the deemed, or assumed, export payment – you will be paid for half of your generated energy at the export FiTs rate of 3.2p/kWh, or 4.5p/kWh for solar PV installed since 1 August. To get this, simply opt in on the FiTs application form.
50kWp solar PV installation on the roof of a farm building generating approximately 43,000kWh a year of which 75% is exported.
Without an export meter, the system owner gets no payment for exported energy.
Once the owner provides the metering, they can claim the export FiTs at 3.2p/kWh, or £1,032 a year.
If the energy is exported to the market, the export payment could increase to 5.2p/kW or £1,677/year.
Example provided by Richard Adams Associates – sites vary depending on circumstances
Above 30kWp you cannot be paid for the export unless suitable half-hourly export metering has been installed – this is often forgotten at the time of commissioning as many installers either lack the knowledge or don’t have enough time to address this part of the process before moving on to the next installation.
Metering costs vary considerably and the key is to shop around – don’t be tempted to go straight to your import supplier. Most suppliers are still struggling with the whole FiTs process and have limited understanding of how to provide what is needed.
Market rates apply to the export element – the wholesale price is around 4.6p/kWh at the moment – and export suppliers have obligations to meet and customers, so generated energy is of real interest to them.
The price will fluctuate between 4.5p/kWh and 8p/kWh depending on the technology, size of generator, likely percentage export and overall generation profile.
Seek advice from a renewable energy specialist – every site is different and the opportunity won’t be right for all.
Ofgem accreditation is required under the Climate Change Levy (CCL) to enable generators to claim Levy Exemption Certificates (LECs) and Renewable Energy Guarantees of Origin (REGOs) which make up an inherent part of the export sale price. This doesn’t cost anything but can be a lengthy process.
Metering rules change – it’s not possible to have different meter operators on the import and export sides. However the market for procuring such services is open and farmers should not think they have little or no choice. Independent suppliers are out there and ready to do business on the right terms.
Power Purchase Agreement terms should be carefully reviewed. The sale and supply of electricity is complicated by fluctuating prices – energy has different values at different times of the day and night, so there are certain benefits accrued from supply at those times which impact on agreed price – so ensure the PPA terms do not adversely impact on agreed sale price.
The cost of supply infrastructure required to connect a generator back into the grid system varies almost as much as charges for electricity; review the market carefully before signing with any new supplier, just as you would if seeking a connection to your business premises.
District Network Operator connections are key – they provide the required export Meter Point Administration Number.