Generating income from renewable energy
There are a number of potential sources of income from small-scale renewable energy generation:
- export tariffs
- feed-in tariffs paid by the government for every kilowatt of electricity generated
- green energy certificates
- green gas support scheme
Export tariffs
If you generate more electricity than you use you can sell the extra electricity back to your electricity company. The payments you receive for selling electricity are called export tariffs.
Energy Saving Trust: Smart Export Guarantees and Export tariffs
Feed-in tariffs for low carbon electricity
Feed-in tariffs were set up to provide financial support for low carbon electricity generation in projects up to five megawatts. The government guaranteed payment to microgenerators for every kilowatt hour of electricity you generate by renewables, including electricity you generate and use yourself. The scheme closed for new installations on 31 March 2019. Existing payments are not affected but no new installations will be eligible.
Since 1 January 2020 feed-in tariffs have been replaced by the Smart Export Guarantee (SEG). This applies to small scale renewable energy producers who have a generating capacity of up to 5MW.
The government regulator Ofgem regulates the feed-in tariff scheme.
Ofgem: Review of the feed-in tariff scheme
Green energy certificates
If you operate a small-scale energy generator you may be able to make money by selling green energy certificates to energy suppliers.
You can save money by using the certificates to get exemptions from some environmental taxes, such as the climate change levy.
The certificates include:
- renewable obligation (RO) certificates (Phased out, but for previous participants ROs will continue, new participants will be able to apply to the Contracts for Difference (CfD) support mechanism)
- levy exemption certificates
- renewable energy guarantee of origin (REGO).
GOV.UK: Renewable Obligation certificates
Green Gas Support Scheme
The Green Gas Support Scheme replaces the Renewable Heat Incentive (RHI) which closed to new applicants on 31 March 2021.
The Green Gas Support Scheme aims to facilitate and encourage renewable generation of biomethane from anaerobic digestion for injection into the gas grid.
Registered participants will receive quarterly payments over 15 years. Payments are based on the amount of eligible biomethane that a participant injects into the grid.
For more information see Green Gas Support Scheme and Green Gas Levy | Ofgem
Interest-free loans
A range of grants and loans are available to help businesses switch to renewable energy.
If you are a small or medium-sized business you can apply for an interest-free loan from the Carbon Trust to invest in renewable energy technology. They can also help you with installation.
In Northern Ireland see:
GOV.UK: Funding to help your business become greener
Interest-free loans are also available from the Energy Saving Trust in Scotland.
Business energy Scotland: Small business loans
Enhanced Capital Allowance scheme
If you invest in certain renewable energy equipment you may qualify for tax breaks called enhanced capital allowances.
GOV.UK: Enhanced Capital Allowances
CRC Energy Efficiency Scheme
If your business is covered by the CRC Energy Efficiency Scheme (formerly the Carbon Reduction Commitment) you can claim credits for any electricity you generate. This means you can buy fewer allowances and save money.
In Scotland, the Energy Saving Trust has developed the Green Network for Businesses. This tool allows you to search by postcode for green businesses in your area. All these businesses have installed energy saving or energy generating technologies .
Once you identify the business that has installed the green technology you are interested in, contact them to organise a visit.
EST: Green Network for Business