Microgeneration allows homeowners and businesses to generate their own energy. They get paid for any excess gas or electricity that they export back to the National Grid.
Read on to find out more about microgeneration and its benefits.
What is microgeneration?
Micro generation is when households or businesses generate their own energy. This energy generation is on a small scale and is cost-effective.
How can I make money from microgeneration?
You can earn money by selling any excess energy you generate to the national grid. This was known as the government’s Feed-in-Tariff (FIT) scheme. The FIT scheme was replaced by the Smart Export Guarantee (SEG) in 2019.
SEG measures the energy exported to the National Grid. This then calculated and paid.
Homeowners and businesses can receive payments through the Renewable Heat Incentive Scheme. This is for any renewable heat technologies they have installed (e.g. biomass boilers and solar water heating). The government aims to increase the amount of heat generated by renewable sources to 12%. This initiative helps towards that goal.
Payments are made over seven years and depend on the type of renewable technology you use. It depends on the amount of clean and renewable heat you generate.
You must obtain a valid certificate for the Microgeneration Certificate Scheme (MCS) to be considered. This confirms that your renewable installation is working. The renewable energy source must be installed an MCS-certified installer. Find an installer here.
What renewable energy options are available?
There are quite a few renewable energy options available. Location and space tend to dictate which renewable sources are suitable.
Below are the UK’s main types of renewable energy sources.
Solar Panels – PV panels are made from silicone and are used to capture sunlight. This is converted into electricity. Solar panels are easy to install and are available through cladding, roof tiling or custom glazing. Direct sunlight is not required to generate electricity. They are there best when sunlight is strong.
Wind Turbines - Wind turbines use wind power to generate energy. The blades on the turbines rotate and this energy is used to create electricity. Domestic wind turbines tend to be pole mounted or building mounted. Significant space is required for this renewable source. Wind turbines work best in areas that have frequent high winds. The stronger the wind power the more energy generated.
Hydro Power – This renewable option uses energy from the running water of a stream or river. The energy propels a turbine connected to a generator and electricity is created. The more water that flows through the turbine, the more energy is generated.
Anaerobic digestion - This involves the breaking down of organic matter. This could be as food or animal waste in order to produce bio gas. This process is completed without oxygen. The bio gas produced contains methane – this is used to generate energy.
Micro combined heat and power – This technology can provide heat and electricity at the same time. It is powered by mains gas or liquid petroleum gas (LPG). It is deemed energy-efficient as it has low carbon emissions. It is a lot more efficient than using fossil fuels.
What are the pros and cons of microgeneration?
To help you decide whether microgeneration is suitable for you, below we outline its main pros and cons:
- Sustainable energy – Renewable energy sources help to reduce your carbon footprint. This is done by lowering the amount of greenhouse gas that is emitted from your property or business.
- Opportunity to make profits – You could get paid for the energy you export to the National Grid.
- Cheaper energy – You could save by generating your own energy.
- Improved business reputation - Sustainable businesses are viewed more favorably by customers.
- Helps to improve the National Grid – The National Grid can become more reliable and secure.
- Initial costs – The initial costs of installing renewable energy sources can be high.
- Can be affected by weather – The performance of renewable sources can be unpredictable. They depends on weather conditions (e.g. wind turbines and solar panels).
- Limitations – Location and space can limit the type of renewable energy sources that are available.
- Impacts on the National Grid - There are concerns whether the grid will be able to handle large upscale in distributed energy. This could call for more efforts to be made on balancing the energy that goes to the grid.
Are there any grants available for microgeneration?
For domestic properties, the Feed-in-Tariff and Renewable Heat Incentive schemes are available. There are more funding options available for businesses. These include:
- Enhanced Capital Allowances
- Power Purchase Agreement
- Salix Finance
- Lease Purchase Agreement
- Business loan
Can I switch energy suppliers?
You can still switch energy suppliers if you have a Feed-in-Tariff (FIT) or Smart Export Guarantee (SEG) scheme. You can even choose to purchase energy from one supplier and receive your FIT/SEG payments from another.
Comparing energy prices and switching suppliers help you find a better deal for your home or business energy. Try our free online quote tool today to find the best energy tariffs available on the market.