UK Landlord Solar: Submetering and Maximum Resale Price Compliance Guide

Key Takeaways

• Landlords in Great Britain cannot profit from reselling electricity to domestic consumers.
• All meters used for billing electricity must be of an approved pattern or construction and certified.
• Specific exemptions from requiring an electricity supply licence exist for small-scale generation and on-site resale.
• Compliance with electricity metering and pricing regulations is the landlord's responsibility.

What is the Maximum Resale Price (MRP) for electricity in Great Britain?

In Great Britain, if you are a landlord or site owner supplying energy to domestic consumers, you cannot profit from the energy you resell to them. This is governed by the Maximum Resale Price (MRP) direction. The MRP states that the maximum price at which electricity may be resold is the same price as that paid by the person who is reselling it, including any standing charges. This direction has been in effect since 1 January 2003.

Ofgem, the energy regulator, oversees this rule to protect consumers. The principle applies regardless of whether the electricity is purchased from a licensed supplier or generated on-site, for example, by solar panels.

Understanding Electricity Resale and Licensing Exemptions

Under the Electricity Act 1989, a licence is generally required to generate or supply electricity. However, specific exemptions exist that may apply to landlords with solar installations or those reselling electricity.

Generation Exemptions

You may not require a generation licence if you are a small generator. This exemption applies to persons who do not at any time provide more electrical power from any one generating station than:

1. 10 megawatts; or
2. 50 megawatts in the case of a generating station with a declared net capacity of less than 100 megawatts.

Supply Exemptions (Resale)

If you are reselling electricity obtained from a licensed supplier, you may be exempt from needing a supply licence if you meet specific conditions. These conditions typically involve supplying electricity only to premises on the same site and complying with certain limits.

Supply Exemptions (On-site Supply)

For landlords generating their own electricity, such as with a solar PV system, an exemption may apply if you supply electricity you generate yourself (or generate yourself together with electricity supplied by a licensed supplier) to specific types of consumers on the same site or via private wires.

Class B Resale Conditions

For certain supply exemptions, specific conditions known as Class B Resale Conditions must be met. These include:

• 10% limit: In respect of each relevant premises, the supplier must not in the previous year have supplied from those relevant premises an amount of Class C electricity which is more than 10 per cent of the Class C electricity supplied in that year to those relevant premises.
• 250 MWh domestic limit: In respect of each relevant premises, the supplier must not in any year supply from those relevant premises more than 250 megawatt hours of Class C electricity to domestic consumers.

These exemptions are detailed in The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001.

Metering Requirements for Submetering Solar Electricity

When submetering electricity, particularly from a solar installation, strict requirements apply to the meters used for billing. These requirements are primarily outlined in Schedule 7 of the Electricity Act 1989 and The Measuring Instruments Regulations 2016.

Meter Specifications

• Appropriate Meter: The supply must be given through, and the quantity of electricity ascertained by, an appropriate meter.
• Approved Pattern or Construction: No meter shall be used for ascertaining the quantity of electricity supplied unless it is of an approved pattern or construction and is installed in an approved manner.
• Certified Meter: Meters must be certified under paragraph 5 of Schedule 7 of the Electricity Act 1989, unless specifically exempt. A meter may be certified by a meter examiner or a person authorised to certify meters of that description.
• Accuracy Standards: No meter shall be certified unless the examiner is satisfied that the meter conforms to such standards (including standards framed by reference to margins of error) as may be prescribed.
• Active Electrical Energy Meters: These are a specific type of measuring instrument covered by The Measuring Instruments Regulations 2016.

Meter Provision and Installation

• Provision: If the authorised supplier agrees, the meter may be provided by the customer. Otherwise, it shall be provided by the authorised supplier.
• Installation Position: The meter shall be installed on the customer’s premises in a position determined by the authorised supplier, unless it is more reasonable to place it outside those premises or in some other position.
• Replacement: The authorised supplier may require the replacement of any meter where its replacement is necessary to secure compliance with Schedule 7 or any regulations made under it, or is otherwise reasonable in all the circumstances.

Meter Maintenance

• Customer Responsibility: A customer must at all times, at their own expense, keep any meter provided by them in proper order for correctly registering the quantity of electricity supplied to them.
• Supplier Responsibility: An authorised supplier must at all times, at their own expense, keep any meter provided by them to any customer in proper order for correctly registering the quantity of electricity supplied.

What you can check yourself, and what you cannot

As a landlord, you are responsible for ensuring your submetering system complies with all relevant regulations.

What you can check yourself:

• Billing rates: Verify that the price you charge your domestic tenants for electricity, including standing charges, does not exceed the price you pay your own supplier.
• Meter presence: Ensure that all domestic tenants being charged for electricity by quantity supplied have an appropriate meter.
• Documentation: Keep records of your electricity supply costs and any meter certification documents.
• Exemption conditions: Regularly review the conditions of any licensing exemptions you rely on to ensure continued compliance, especially regarding generation capacity and resale limits.

What you cannot do yourself:

• Certify meters: Meter certification must be performed by a meter examiner or a person authorised under regulations. You cannot self-certify a meter.
• Install unapproved meters: You cannot install meters that are not of an approved pattern or construction, or install them in an unapproved manner, for billing purposes.
• Set your own resale price: You cannot set a resale price for domestic consumers that allows you to profit from the electricity supplied.

Ensuring compliance with these regulations often requires professional advice and services from qualified electricians and meter providers.

What the published sources do not tell you

While the regulatory framework for electricity resale and metering in Great Britain is well-defined, certain practical details and specific guidance for solar installations are not explicitly covered in the sources we checked:

• Specific technical compliance for solar submetering: no source we could reach publishes specific technical compliance requirements for solar submetering beyond general electricity metering regulations.
• Detailed grid connection criteria: Specific application processes or technical standards from Distribution Network Operators (DNOs) for landlord-owned solar installations are not provided.
• Current MRP unit rates: The Maximum Resale Price is a principle, not a fixed unit rate. no source we could reach publishes current unit rates or specific calculation methodologies, as Ofgem's guidance refers to a 2005 update and a call for input in 2025.
• Dispute resolution: Information on how to resolve disputes regarding the Maximum Resale Price, other than through civil courts, is not detailed.
• Solar generation impact on MRP: Specific guidance on how solar generation impacts the "resale" of electricity to tenants under the MRP direction is not fully elaborated.
• Guarantees of Origin for landlord solar: Details on how to obtain or verify "Guarantees of Origin" for electricity produced from landlord-owned solar installations are not provided beyond the request process to the Authority.
• Practical steps for meter approval: Practical steps for landlords to ensure their submetering systems meet the "approved pattern or construction" and "certified" requirements are not explicitly outlined.
• Penalties for non-compliance: Information on potential penalties for non-compliance with metering regulations or MRP beyond general fines is not specified.

For these specific details, landlords may need to consult with metering professionals, DNOs, or legal advisors specialising in energy regulation.