What is Licence Exempt Supply (LES)?

Licence Exempt Supply—often called sleeving or peer-to-peer supply—is a way for renewable energy generators to sell electricity directly to homes and businesses without needing a full electricity supply licence.

This setup has been around for over 20 years, thanks to a regulation called The Electricity (Class Exemptions from the Requirement for a Licence) Order 2001. But in 2025 a rule change called BSC Modification P442, approved by Ofgem, made it easier and more financially rewarding to use LES. These changes commenced from April 2025.

How Does LES Work?

LES lets a renewable generator team up with a licensed energy company (called an offtaker) to match their electricity generation with a customer’s energy use—usually a business or industrial site.

When the match is successful, everyone involved can avoid associated charges, such as environmental levies. Normally, suppliers collect charges to fund renewable schemes like CfD, FiT, and RO. But under LES, these charges don’t apply—which means savings for both the generator and the consumer.

Key Details

• Supply limits: Up to 2.5MWh per half-hour can be supplied through LES, with a max of 1.25MWh going to domestic customers.
• Generator size: LES is available for generators with a capacity of under 50MW.
• Generators can not be ROC accredited.

What’s the Financial Upside?

Generators can earn circa £15 per MWh during matched periods, depending on how well the energy use aligns with generation.

Things to Watch Out For

• Stay within limits: If you go over the 2.5MWh (or 1.25MWh for domestic) limit and still claim full levy exemptions, you could face penalties. You can export more, but only the eligible portion counts as LES.
• No match, no benefit: LES only works when generation and consumption are matched. If there’s no match, the financial perks don’t apply.
• Approval needed: Elexon must approve your LES setup. Once that’s done, your offtaker handles the matching—so you don’t need to worry about the day-to-day management.

Wider Impact & Future Considerations

While LES helps participants save money, the overall cost of funding renewable schemes stays the same. That means other consumers may end up paying more to cover the difference.

Also, while LES is currently supported by regulations like P442, future policy changes could affect its viability—including adjustments to exemption thresholds or levy rules.

If you would like to discuss Licence Exempt Supply in more detail please get in contact with us.

Email – Hello@epower.net

Telephone – 01912457330