Octopus launches new export tariff following FIT closure

Octopus Energy has launched a new tariff to replace the export element of the feed-in tariff (FIT) which closed to new applicants at the end of March.

The supplier says its Outgoing Octopus tariff will allow customers to sell surplus electricity from rooftop solar panels at a higher price than under the government’s subsidy scheme.

“Outgoing Octopus is designed to make it easy for households to choose to go green,” said Octopus Energy chief executive Greg Jackson.

“By paying households to adopt solar, we bring locally generated energy to more people and help the UK adopt a cleaner, cheaper energy system.”

“At Octopus Energy, we strongly believe in using smart technology to make energy work for our customers, and we’re delighted to be the first movers into a promising new market”.

There will initially be two variations of the tariff. Customers on Outgoing Octopus Fixed will be paid 5.5p for each kilowatt hour they export to the grid.

Those on Outgoing Octopus Agile will be paid at a variable rate reflecting half-hourly prices in the wholesale market. Octopus says the time-of-use tariff will allow customers to boost their earnings by storing excess electricity in batteries when prices are low and then selling it when they rise.

James Court, policy and external affairs director at the Renewable Energy Association, said: “Octopus Energy is at the forefront of a new era for renewables and this tech innovation, arriving at the moment the feed-in tariff drops away, is hugely welcome and exciting news for industry and consumers.”

Under the FIT scheme, accredited generators receive payments for both the total power they produce (the generation tariff) and the excess electricity they supply to the grid (the export tariff). The scheme closed to new applicants on 31 March.

The government is planning to replace the export tariff with a new smart export guarantee that forces suppliers to pay eligible generators for electricity supplied to the grid whenever wholesale prices are positive. A consultation on the proposals ended on 5 March but the government has yet to publish its response.

Eon has announced it is offering a “solar reward” for exports worth 5.24p per kilowatt hour to first 500 customers to have solar panels installed by the supplier. The payments, which are intended to “bridge the gap” to the introduction of the smart export guarantee, will only last for one year and will calculated on the basis that half of the power produced by the installations is exported to the grid.

“We know how important solar is for our future which is why we’re leading the industry in rewarding our customers for doing their part to help,” said Eon UK chief executive Michael Lewis.

“By taking power into their own homes, and hands, and generating their own clean energy which rewards them for exporting back to the grid, this not only gives our customers greater control over reducing their electricity consumption but also helps us create a better tomorrow by providing more clean and green energy solutions.”

Analysis of Ofgem figures by Regen recently revealed that 77 wind and solar projects, representing 21MW and 32MW of capacity respectively, had failed to secure subsidies before the closure of the FIT scheme due to quarterly caps on deployment. Community Energy England said at least 30 of these projects are community initiatives.