Energy customers who produce renewable energy to get £800,000 compensation

• Good Energy Limited (GE) has agreed to refund over £453,000 to Feed-In Tariff (FIT) customers who have been charged an unauthorised administration fee on a quarterly basis, and to compensate them with a goodwill payment totalling £200,000. Those charged represent 0.6% of GE's total FIT customers.
• F&S Energy Limited (F&S) has agreed to refund £94,040, inclusive of VAT, to all FIT customers who have been charged an unauthorised administration fee on a quarterly basis and a biennial meter verification charge, and to compensate them with a goodwill payment totalling £50,000, excluding VAT.
• This is a total of £800,000 distributed to over 1,600 affected customers, thanks to the robust work of energy regulator Ofgem.

Cooperation between FIT Licensees and energy regulator Ofgem has uncovered that a small number of installation owners involved in renewable and low-carbon electricity generation, such as via wind and solar, are entitled to a total of £800,000 compensation. Known as 'Feed-In Tariff (FIT) generators' (FIT customers), these customers received an unauthorised administration charge from their licensees Good Energy Limited (GE) and F&S Energy Limited (F&S).

FIT customers are the owners of accredited installations involved in renewable and low-carbon electricity generation, and this non-compliance by the energy companies has meant that those affected received a lower FIT payment sum than they were entitled to.

The FIT scheme was introduced 1 April 2010 by government to promote the uptake of renewable and low-carbon electricity generation. The scheme requires participating licensed electricity suppliers to make payments to FIT customers for electricity generated and exported by accredited installations. FIT customers range from houses with a few solar panels (often technically referred to as MCS Scale (small scale)) to farms with a multiple panels and wind turbines (often technically called ROOFIT (larger scale)). When FIT customers receive the FIT payments at the level they are entitled to and the scheme intended for them to receive, they are provided with a financial incentive for the generation of electricity from renewable resources.

Cathryn Scott, Director of Enforcement and Emerging, Issues said:

"A priority for Ofgem is reaching Net Zero at the lowest cost to consumers in both a sustainable and efficient way. It is important that those companies partaking in decarbonisation schemes remain compliant, and that renewable generation is appropriately incentivised in line with government policy.

"The outcome of this matter sends a clear reminder to suppliers that they must comply with their obligations under the decarbonisation schemes and ensure that FIT customers receive payments they are entitled to for their renewable generation. This scheme forms a key part of the range of energy market reforms designed to reduce Britain's reliance on expensive gas imports and accelerate the transition towards cleaner and more secure supplies of home-grown energy."

Good Energy Limited (GE), a voluntary FIT Licensee serving over 182,000 FIT customers, has agreed to make a refund of £453,000, accompanied by goodwill compensation totalling £200,000, after it was found to have implemented an unauthorised administration charge on a quarterly basis of £25 per installation. 500 FIT customers were affected per quarter, with 1,167 having a charge applied at least once.

The review of FIT Licensees also found that F&S Energy Limited (F&S), a voluntary FIT Licensee serving 455 FIT customers, applied an unauthorised quarterly administration charge of £100 (previously £20) per installation, affecting 80 FIT customers, and an unauthorised verification charge once every two years of £55 (previously £100) per installation, affecting 453 FIT customers. F&S has agreed to make a refund of £94,040, inclusive of VAT, in addition to £50,000, excluding VAT, as a goodwill compensation payment.

The refund and goodwill payment will not only compensate the customers for their loss but also provides them with an additional goodwill payment to reflect the breach of the Standard Licence Conditions (SLC).

FIT customers served by Good Energy can expect to receive £25 back per installation for each charge applied, plus VAT, a 3.3% uplift to the refund and a goodwill payment. Some customers affected by this charge are expected to be refunded directly into their accounts by end of October and some others by end November 2022. Good Energy has confirmed that any FIT customers impacted by this matter have already been contacted.

FIT customers served by F&S Energy can expect to receive £100 or £20 back per installation for each quarterly charge applied, and £55 or £100 for each biennial meter verification charge applied, plus VAT, and a goodwill payment gesture, excluding VAT. Customers affected by these charges are expected to be refunded directly into their accounts by end of November 2022.

In the wider sustainability and decarbonisation space, Ofgem is working to support delivery of the UK Government's net zero greenhouse gas emissions target by 2050. Our current actions include: building adaptability into our price controls to ensure network companies invest efficiently, setting-up a regulatory fund to unlock investment in innovative solutions to tackle climate change, creating a more flexible electricity system to ensure that consumers will benefit from the lowest cost transition to a reliable net-zero system, as well as other actions. See here for Ofgem's Decarbonisation Action Plan.

Notes to editors

The application of FIT administration charges to certain FIT Generators every quarter and once every two years meter verification charges are in breach of GE and F&S' obligations as FIT Licensees under the Standard Conditions of Electricity Supply Licence ("SLCs"). The energy companies' non-compliance meant that FIT Generators received less FIT payments than they were entitled to.

The FIT scheme was designed by government to promote the uptake of renewable and low-carbon electricity generation (e.g., Solar photovoltaic, Wind, Micro combined heat and power, Hydro and Anaerobic digestion). The scheme's legal framework is contained in the Feed-in Tariffs Order 2012 (as amended) and the Standard Conditions of Electricity Supply License (SLC). Two types of participants are part of the scheme: (i) FIT generators - the owners of accredited installations and (ii) FIT licensees - licensed electricity suppliers who make FIT payments for the electricity produced by accredited installations. FIT generators register with their choice of FIT licensee, from whom they receive payments which are usually quarterly for the electricity their accredited installations generate and export. These payments are based on meter readings that FIT generators submit to their FIT licensee.

Administration of the FIT scheme is shared between Ofgem and FIT Licensees. FIT Licensees are responsible for making FIT payments, among other tasks, while Ofgem is responsible for ensuring suppliers comply with the FIT scheme requirements, amongst other things.

Ofgem publishes tariff tables for FIT each year and that the Secretary of State determines qualifying costs

FIT licensees are responsible for making FIT payments to FIT generators in line with the SLCs

For more information about Feed In Tariff's see the Generator Guidance & FAQs and About the FIT scheme pages.

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