Government plans to guarantee households and small businesses can sell any excess renewable power they generate to the grid took a step forward yesterday with the launch of a second consultation on the proposed Smart Export Guarantee mechanism.

Earlier this year the government controversially closed the feed-in tariff (FiT) mechanism, removing the financial incentives for new small scale renewables installations and effectively requiring households and businesses that install solar panels and other onsite generation technologies to export any power they do not use to the grid for free.

Ahead of the closure of the FiT the government unveiled plans for a Smart Export Guarantee (SEG) mechanism that is designed to establish a market that ensures renewable power generators can always sell their power to the grid.

A consultation on the proposed policy was launched at the start of the year and the government is currently considering the responses with a view to publishing a formal response "in the coming months".

The renewables industry has called on Ministers to fast track the introduction of the SEG, warning that currently households and businesses that choose to install solar panels have no guarantee they will be able to sell excess power.

Yesterday, the government moved to lay the groundwork for the new policy with the launch of a separate consultation on the changes to supplier licenses that will be necessary to enable the SEG.

"Under the SEG, government would legislate to require suppliers to remunerate small-scale low-carbon generators for the electricity they export to the grid," the government said. "Part B of the consultation proposes the modifications to electricity supply licence conditions which would be required to introduce a SEG. It is primarily of interest to organisations who are (or may in future be) bound by the electricity supply licence conditions, but we welcome comments from anyone with an interest in the future of small-scale electricity generation."

A spokesperson for the Department for Business, Energy, and Industrial Strategy said the consultation provided further evidence of the government's commitment to expanding the market for distributed energy systems.

"The future of energy is local - with consumers at its heart," they said. "We're hoping a new market-led mechanism will encourage more households to become renewable electricity generators, by guaranteeing them a price for the electricity they export to the grid."

A number of energy suppliers have pre-empted the SEG by introducing their own export tariffs for households and businesses with solar panels and other clean technologies.

The BEIS spokesperson welcomed the trend adding that it was "encouraging to see some suppliers already offering competitive tariffs to reduce bills, encourage local trading and ultimately cut emissions by making the whole electricity system more efficient".

The news came in the same week as the Engineering and Physical Sciences Research Council (EPSRC) announced that it had awarded new funding to a project at the University of Bristol to explore how peer-to-peer (P2P) software platforms could enable the 'free trade' in excess energy.

The £460,000 grant to the Household-Supplier Energy Market (HoSEM) project will help researchers assess the feasibility of a 'democratised' P2P energy market.

"Perhaps you have installed some solar panels and you would much rather contribute your excess generation free of charge to the nearby homeless shelter instead of selling it back to the utility provider," explained Dr Ruzanna Chitchyan, who leads the project. "Or sell it to someone else at a better price or give it to your neighbour. The households that produce the energy should have the power to decide on what to do with it. Similarly, consumers should be able to decide whose energy and at what price they want to buy. The HoSEM trading platform will support this freedom of choice."