UK Electricity Licence Exemption Order 2001: Generation Schedule 2 Guide

Key Takeaways

• The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 Schedule 2 exempts small generators from requiring a licence.
• A general exemption applies to generators not exceeding 10 megawatts.
• A higher exemption limit of 50 megawatts is available for stations with a declared net capacity of less than 100 megawatts.
• On-site supply to single consumers or qualifying groups is disregarded from these capacity calculations.

What are the UK Electricity Licence Exemption rules for generation under Schedule 2?

The UK Electricity (Class Exemptions from the Requirement for a Licence) Order 2001, specifically Schedule 2, sets out exemptions for small generators from the requirement to hold an electricity generation licence. This framework allows certain generating stations to operate without a licence, primarily based on their capacity. Generally, a generating station is exempt if its capacity does not exceed 10 megawatts (August 2026). A higher exemption limit of 50 megawatts is possible for stations with a declared net capacity of less than 100 megawatts (August 2026).

Understanding The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 Schedule 2

The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 (S.I. 2001 No. 3270) provides the legal basis for these exemptions in Great Britain. Schedule 2 of this Order is titled "SCHEDULE 2 EXEMPTIONS FROM SECTION 4(1)(a) OF THE ACT (GENERATION EXEMPTIONS)". This section specifically addresses "Class A: Small generators". It outlines the conditions under which a generator can operate without a licence, focusing on capacity and supply arrangements.

What are the generation capacity limits for exemption?

Schedule 2 defines specific capacity limits for generators seeking exemption. These limits are:

• 10 megawatts: This is the general capacity limit for exemption. If your generating station does not exceed 10 megawatts, it typically qualifies for exemption under this provision (August 2026).
• 50 megawatts with <100 megawatts declared net capacity: A higher exemption limit applies to generating stations with a capacity of 50 megawatts, provided they have a declared net capacity of less than 100 megawatts (August 2026). This allows larger, but still relatively small, stations to operate without a licence under specific conditions.

The Order also provides relief for situations where generation temporarily exceeds the 50 megawatts limit. This applies if the excess power is due to technical circumstances outside the reasonable control of the person providing that power (August 2026).

How does on-site supply affect these limits?

The calculation of generation capacity for exemption purposes can be influenced by how the power is supplied. Schedule 2 includes provisions that disregard certain on-site supplies from the overall generation caps:

• Single Consumer Disregard: Power supplied to "a single consumer who occupies premises which are on the same site as the premises where the generating station is situated and who consumes all the power provided to him" is disregarded (August 2026). This means that power consumed entirely on-site by a single entity does not count towards the generation capacity limits for exemption.
• Qualifying Group Disregard: Similarly, power supplied to "two or more consumers who form a qualifying group each of whom occupies premises which are on the same site as the premises where the generating station is situated" is also disregarded (August 2026). This extends the on-site disregard to groups of consumers meeting specific criteria.

These disregards are important for solar installations that primarily serve on-site demand, as they can help ensure the installation remains within the exemption limits.

How we verified these exemptions

We verified the details of the UK Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 Schedule 2 by directly reviewing the statutory instrument. Our review was conducted on 23 August 2026, using the official legislation website. This ensures that the information presented here directly reflects the legal text.

Navigating UK electricity regulations

Understanding generation exemptions is one part of operating a solar installation in the UK. Other regulatory aspects may apply depending on your system's design and purpose. For instance, if you plan to supply electricity via private wires, you may need to consider different exemptions. You can learn more about these in our guide on UK Electricity Licence Exemption Order 2001: Private Wire Supply Schedule 4.

Additionally, broader regulatory frameworks impact solar projects. These include considerations for UK Climate Change Levy solar exemptions and UK Building Regulations Part L Regulation 26. Always consult the relevant statutory instruments and professional advice for your specific project. If you are planning a new solar installation, you can use our solar sizing tool to estimate your needs.