I have long supported local energy generation, including through multiple Local Electricity Bills which have sadly not passed into law.

As it stands, the Government’s main scheme to encourage local energy production is the Smart Export Guarantee (SEG) scheme. Through this scheme, local energy generators must sell their energy to energy companies, who pay generators a fraction of what they later charge customers.

In the case of one of my constituents, who is a SEG Generator, they say that, on average, they are only paid 5-6p per Kilowatt hour, whilst energy companies sell the energy for 50-60p per kilowatt hour, ten times more.

Notably, whilst the amount that SEG Licensees charge has skyrocketed over the last year, the payout for SEG Generators has stayed the same. In other words, the energy companies are profiteering from the energy generated by households and not fairly compensating them.

At the moment, the only stipulation on SEG tariff rates is that they are always above zero. I believe that the Government should look to strengthen this stipulation, to make the exchange fairer for SEG Generators and to not deter other households from becoming SEG Generator and producing clean energy for the country.

I therefore wrote to the Minister for Energy and Climate, Graham Stuart, and raised this issue with him.

I have now received a reply from Mr. Stuart, a copy of which I have posted below for you to see.

Sadly, the Minister has confirmed that the Government has no intention of intervening to increase the minimum SEG tariff rate beyond ‘above zero’, instead, leaving it to the ‘market’ to decide payouts to SEG Generators like my constituent.

I worry that this lack of action to address the major financial imbalance between generators and licensees is going to deter more people from becoming SEG Generators, and limit the ability of local, green energy generators to help the country reach net zero. 

I can assure you that I will continue to follow developments with the SEG scheme closely and press the Government to ensure that local energy generation is both sustainable and encouraged.