Solar Panels – DNO, Zero Export and Regulations

[Deleted User]

Andrew Capstick’s MSE editorial July 4, 2022 asks the question, Solar Panels - are they worth it?

Some DNO providers like Octopus require their smart meter to be installed and will buy from you your exported power less your self-consumption on their SEG Tariff currently at £0.041/kWh.Andrew cites £6,500 as a typical cost: so, if you kept this money in the bank what would you earn per year at 10% simple. Interest.

The answer is £6500 x 0.1 = £650 or £1.78 per day.

In order to join the SEG Tariff you must provide the DNO with an MCS Certificate now here is where things become political and quite strange. The MCS regulating body has told me that the certificate only applies to the Solar Panels not the G98 Grid-Tie Inverter. Yet it is the inverter that connects to the DNO supply so does the need for an MCS Certificate represent a restrictive practice if the panels were installed by competent person(s) who are not MCS registered?.

Risk to the DNO is mitigated because the interposing G98 inverter protects the DNO supply.

In many parts of the world DNO do not allow export to their grids at all. This is because they use overhead distribution with step down transformers to premises. Solar Panel users have to use zero export inverters that ensure power is never fed back to the grid. In these terms does the solar install becomes just another household appliance?

Inverter manufacturers sell all over the world so the one you are using will likely feature zero export but manufacturers are reticent about use in the UK. Is this because the G98 regulations do not accommodate zero export?

The burning issue is the amount of export or excess power that has to be got rid of. Some devices sense this and divert to hot water heating with batteries being a very expensive alternative. Better to have a micro system consisting of two Solar Panels such as Sunpower Maxeon 3 400W with a 40-year warranty feeding a zero-export configured grid tie inverter. These panels have exceptional low light performance. The install cost here around £1500 something that would have earned at 10% simple interest £150/year or £0.41 per day. Better to lock up £1500 in your property rather that £6500.

The payback is not in money earned more by what is saved. With only 6 months of solar power available for self-consumption and at capped rates of £0.28/kWh the micro install needs to save a minimum of 3kWh/day during this time something that is achievable especially if the advice here is implemented.

Your thoughts please.

Reed_Richards

DNO stands for Distribution Network Operator; they are responsible for your electricity supply infrastructure and are different entities to the actual suppliers.  Octopus is not a DNO.

This page lists the DNOs: 
https://en.wikipedia.org/wiki/Distribution_network_operator#:~:text=A distribution network operator (DNO,electricity to most end users.  

Alnat1

Octopus pay 4.1p/kWh for SEG only accounts, if you do not get your supply from them. They pay 7.5p to customers they also supply with electricity.

They also have the Agile Outgoing option for supplied customers, which pays a price linked to the market rate and is split into 30 minute time slots. Today in my Yorkshire region that rate varies between 18.48p and 32.92p.

Since solar/battery installation earlier this year my electricity consumption from the grid has reduced from an average 300/kWh a month to around 20/kWh a month. If I continue this for 6 months of the year, with some smaller savings over winter, I estimate I will import around 2000/kWh less per year. I will also get paid for my exports, already over 1000/kWh since early March installation, averaging 15p/kWh.

I'll work out my actual savings after 12 months but I'm sure the system will pay for itself in a few years. So yes, for me I believe it will be worth it.

[Deleted User]

There is no discrimination. The SEG rules state:

‘For PV, wind and micro-CHP installations up to 50kW, generators should demonstrate that the installation and installer are suitably certified. An applicant may have an installation certificate to demonstrate this. This may be a Microgeneration Certification Scheme (MCS) certificate, but the SEG recognises other schemes may be equivalent to MCS.’

That said, suppliers are allowed to choose which of the certification schemes they are happy with. Octopus has chosen MCS: that said, there is nothing to stop a homeowner going to a supplier that is happy with A N Other; getting a second MPAN and then switching to Octopus for SEG.

As a SEG recipient, the supplier wants to see DNO sign off on the installation. As part of the approval process, the DNO will look at the proposed solar and battery system in its entirety and consider the implications for the local Grid. The DNO may impose a site export limit. It also wants to know that export from the system will shutdown within the prescribed time in the event of a Grid failure.

I disagree with the your suggestion that PV solar with a battery makes no economic sense. I am looking at a 10 year payback at today’s prices for my system. The key to a sensible return period is a solar/battery system that is sized to meet household demand. My home is effectively off the import grid for electricity from March to late October.

QrizB

The opening post is so stuffed with errors I don't quite know where to start.

[Deleted User] said:

Some DNO providers like Octopus require their smart meter to be installed and will buy from you your exported power less your self-consumption on their SEG Tariff currently at £0.041/kWh.Andrew cites £6,500 as a typical cost: so, if you kept this money in the bank what would you earn per year at 10% simple. Interest.

The answer is £6500 x 0.1 = £650 or £1.78 per day.

There is nowhere to save £6500 and receive 10% annual interest. MSE's current best 5-year fixed-rate account is paying 3.3%.

£6500 x 0.033 = £214.50/yr. Just under 60p/day.

A typical 4kWp solar PV system will generate 4000kWh/yr.

• If you export all 4000kWh/yr at the best current export rate - offered by Octopus - of 7.5p/kWh,you earn £300/yr.
• If you use 1000kWh/yr in place of grid electricity at 28p/kWh and export the remaining 3000kWh/yr, you earn £505/yr.
• If you can arrange your affiars so you use 2000kWh/yr in place of grid electricity at 28p/kWh and export the remaining 2000kWh/yr, you earn £710/yr.

Inverter manufacturers sell all over the world so the one you are using will likely feature zero export but manufacturers are reticent about use in the UK. Is this because the G98 regulations do not accommodate zero export?

I have no idea why you would want a zero-export configured inverter, given tha in the UK you can sell to the grid. You will be wasting your excess generation rather than selling it, which is not "moneysaving" by any means.

Better to have a micro system consisting of two Solar Panels such as Sunpower Maxeon 3 400W with a 40-year warranty feeding a zero-export configured grid tie inverter. These panels have exceptional low light performance. The install cost here around £1500 something that would have earned at 10% simple interest £150/year or £0.41 per day.

Your simple interest calculation is flawed, as above.

The payback is not in money earned more by what is saved. With only 6 months of solar power available for self-consumption and at capped rates of £0.28/kWh the micro install needs to save a minimum of 3kWh/day during this time something that is achievable ...

An 800Wp system will generate around 800kWh/yr in the UK. That's less electricity generated in total than your "minimum of 3kWh/day" to break even, so no it is definitely not achievable.

Your thoughts please.

I'm not convinced by your argument. I've made some comments above and others have previously shared their own thoughts.

[Deleted User]

QrizB said:

I have no idea why you would want a zero-export configured inverter, given tha in the UK you can sell to the grid. You will be wasting your excess generation rather than selling it, which is not "moneysaving" by any means.

Hello QrizB

Let me help you out here...

What you have NOT pointed out in your critique is why are SEG rates so poor. But before I give a view on this there is a real need to make solar power affordable to even the poorest in society with a view to lowering their energy costs. The issue is one of Grid Infrastructure: if the SEG rate was say £0.48/kWh everybody with a good credit line or money in the bank would install solar power causing immense damage to the DNO three phase distribution network by unbalancing phases and causing substation fires.

So, the SEG rates are kept very low to discourage large scale domestic Solar installations and should remain so for this reason.

By embracing zero-export as the basis for large scale domestic adoption of Solar Power consumers' can substantially lower their energy costs without damaging DNO infrastructure and at an affordable cost. There is of course a conflict of interest: DNO providers as businesses want to sell you electricity. Wide spread adoption of zero-export would hurt their bottom line because there is minimum amount that customers must spend before it becomes profitable for them to stay in business.

This then feeds into the Generators' themselves: they sit there idling waiting for the wholesale spot price of electricity to rise before their stations' can ramp up output to run profitably. So, they need people to consume more electricity as a business too.

Did this help?

gefnew

You seem to have not read previous posts dno are responsible for the supply network nothing to do with seg or any thing to do with solar apart from granting g99 approval when a large installation takes place in an area.

[Deleted User]

gefnew said:

You seem to have not read previous posts dno are responsible for the supply network nothing to do with seg or any thing to do with solar apart from granting g99 approval when a large installation takes place in an area.

Hello gefnew

Semantics: DNO or DNO Provider, I have tried to use the latter but you are quite right Octopus Energy is not a DNO. Nevertheless, to join their SEG scheme the DNO must be notified of the install. G99 installs are not strictly domestic although they can be. The reason why the DNO needs to be informed is because they carry out maintenance on their network but more importantly to ensure that their three-phase distribution network remains balanced within allowable limits. When I have said DNO, providers like Octopus are synonymous in these respects.

If a SEG 4kW (G98) install inverter was changed to Zero-Export the inverter would block the excess export power after self-consumption. This power would be lost to the consumer. On the other hand, inverter manufacturers supply hybrid inverters where this excess power is available to the user usually for battery charging. When the battery is fully charged, the excess power is again lost to the consumer.

Commercial G99 installs are usually three phase and so balancing should not be an issue at least in theory.

Point taken, hope this helps.

QrizB

WattNext said:

Did this help?

No, not really, you've completely misunderstood reality.

WattNext said:

QrizB said:

I have no idea why you would want a zero-export configured inverter, given tha in the UK you can sell to the grid. You will be wasting your excess generation rather than selling it, which is not "moneysaving" by any means.

What you have NOT pointed out in your critique is why are SEG rates so poor.  ... the SEG rates are kept very low to discourage large scale domestic Solar installations and should remain so for this reason.

SEG rates are set by suppliers (there's a clue in the name) not the DNO. SEG only exisits because Ofgem mandated it; there was a period when the FIT scheme closed when most suppliers didn't pay anything at all for export.

So suppliers set SEG rates to suit themselves. Hardly anyone switches supplier based on SEG rates (only a few % of households have non-FIT generation assets) so some of the big suppliers have very low SEG rates.

There's a table here that compares current offers:

https://www.solarpanelprices.co.uk/articles/solar-panels/best-smart-export-guarantee-tariffs/

if the SEG rate was say £0.48/kWh ...

Export is just another source of energy for your supplier. They can currently buy electricity wholesale for 17p/kWh so there's no way they're going to pay more than that for the dribs and drabs or your (or my) intermittent surplus. (Last year they were buying for 6p/kWh.)

By embracing zero-export as the basis for large scale domestic adoption of Solar Power consumers' can substantially lower their energy costs without damaging DNO infrastructure and at an affordable cost

But by embracing SEG export consumers can further lower their energy costs, at no additional cost to themselves.

X+Y > X for all positive values of Y.

Wide spread adoption of zero-export would hurt their bottom line because there is minimum amount that customers must spend before it becomes profitable for them to stay in business.

False. Standing charges exist for a reason.

[Deleted User]

QrizB said:

SEG rates are set by suppliers (there's a clue in the name) not the DNO.

Your lengthy reply does seem rhetorical. Can you tell us what exactly your supplier does with the electricity you export?

QrizB

[Deleted User] said:

QrizB said:

SEG rates are set by suppliers (there's a clue in the name) not the DNO.

Your lengthy reply does seem rhetorical.

Pot, kettle.

Can you tell us what exactly your supplier does with the electricity you export?

My supplier? My supplier does nothing in particular with it, since I'm receiving FIT payments. They simply take my meter readings, do a bit of admin then pass on the payment from the Government.

In return, I'd quite like you to explain exactly how foregoing SEG payments (by using a zero export setting on your inverter) is going to be more cost-effective than taking your suppliers money for surplus power would be.