Selling solar power back to the National Grid

Solar energy is renewable energy rapidly growing in popularity among homeowners in the UK. When you invest in solar panels, you can save a large amount of money that you’d normally spend on energy bills. 

One of the best things about installing solar panels in your home is that you can make money by selling any unused energy back to the National Grid. The Government has made it such that large energy suppliers must pay solar panel owners for every unit of electricity they feed to the National Grid.

If you’re a homeowner planning to install solar panels or have them already, this article will help you learn more about selling solar power back to the National Grid. How much can you make selling solar power in the UK? Keep reading to learn more.

Selling your energy back to the National Grid is worth it since you’re converting the excess into cash. Even though there’s a long process involved and a lot of red tape, homeowners who have tried it say it’s worth the effort.

After all, what would you gain by letting the excess energy go to waste? 

Selling it to the National Grid also promotes environmental conservation since excess energy is channelled to other homeowners who can’t afford to install solar panels. These homeowners would otherwise use exhaustible forms of energy like coal and natural gas.

Installing an export meter and feeding the excess power back to your supplier would earn you between 6p–9p per kWh sent back.

Discover how much solar panels would cost for your home by answering a few quick questions

Currently, there are two main ways to sell solar power back to the National Grid: The Feed-in Traffic (FiT) and the Smart Export Guarantee (SEG).

The Feed-in Tariff (FiT)

This method of selling solar power was introduced by the UK Government in 2010 to promote the uptake of renewable energy.

Homeowners and business owners who installed renewable technology could get paid for all the energy generated if they were registered with a provider under the scheme, whether used by them or not. They also earn money by sending surplus energy back to the supplier. 

This means there are two payment tariffs from this scheme: 

• Generation Tariff, where you get paid per unit of electricity you generate.
• Export Tariff, which pays you for each unit of electricity you export to the National Grid. 

The payments are made quarterly from the registration date and based on the energy suppliers’ FIT licences. In this scheme, you not only save money by using a renewable and low-carbon source of energy but also earn tax-free money from it. 

While the FIT scheme was closed to new applicants in 2019, those already registered can continue to receive payments for 20 years after the eligibility date.

This scheme was replaced by the Smart Export Guarantee (SEG), now the most common method of selling solar power back to the National Grid.

The Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) scheme is the latest power selling scheme introduced by the UK Government in 2020. 

The SEG power selling scheme is available to homeowners with solar panels and those with anaerobic digesters, wind turbines, hydro generators and combined heat and power micro-generators. 

However, if you have solar panels, you’re likely to benefit more since the panels generate a lot of extra energy, which you can convert into money.

To start benefiting from this government-supported scheme, you first need to register for the SEG tariff through an approved energy supplier. 

If your energy supplier has more than 150,000 domestic electricity customers, they are required by the government to offer SEG tariffs. However, smaller suppliers can choose whether to offer export tariffs or not.

Find out from your supplier if they offer export tariffs and let them help you sign up for the SEG scheme. You can also shop around for suppliers with the best rates and sign up under them.

After signing up, you can benefit from the Smart Export Guarantee in two different ways:

• Energy savings: When you install solar panels, you’ll save a significant amount of money on your energy bills. Solar power is not only environmentally friendly but also more effective and cost-efficient. This means less money leaves your pocket after the initial investment to have solar panels installed.
• Surplus energy export: Your supplier will also pay you for hosting a solar panel on your home and exporting the surplus energy generated to them. To help you get the readings accurately and know how much they owe you, you’ll need to install a half-hourly meter.

To start selling solar power back to the grid you’ll need to buy a battery to store your excess energy. (Image credit: Adobe)

To apply for the SEG tariff with your energy supplier, you need to have the following:

• A renewable power-generating system, such as solar panels, anaerobic digesters, wind turbines, hydro generators or combined heat and power micro-generators. 
• A half-hourly meter to export readings to your supplier. Ask them to help you install a smart meter if you don’t have one yet. Most suppliers will do this for free, but if your system produces more than 30kWh of electricity, you’ll need to buy a special export meter.
• You must not be registered under the Feed in Tariff (FiT) to be eligible for SEG. However, if you still want to claim SEG, you can keep your FIT generator status but must give up your FIT exporter status.
• Your solar panel installation must be certified under the SEG eligibility requirements.

To get an SEG tariff, you need to shop around for the best deal before signing up with a supplier. There are 15 electricity suppliers in the UK that will pay you for selling power under the SEG tariff. 

You can find the list of the SEG tariff suppliers on the Solar Energy UK website. The suppliers offer different rates for different energy packages, and you don’t have to sign up under the one currently supplying your energy. 

Some suppliers offer fixed rates, while for others, the rates are variable. Therefore, you should keep checking the rates and confirming with other suppliers to ensure you stay under the best deal.

If you’re a renewable energy owner who is not registered under FIT, the Smart Export Guarantee may be the only legitimate option for selling power to the National Grid. However, the SEG comes with some drawbacks, which include:

• Lower payments: Solar power producers who sell energy under the SEG scheme are paid much less than those registered under the FIT scheme. Under FIT, energy owners were initially paid more than 40p per kWh of electricity exported. Though this figure has dropped due to the increasing number of homes installing solar panels, they still earn more than SEG, which pays between 6p–9p per kWh depending on the supplier.
• The hassle of upgrading your meter: To get paid for selling solar power under SEG, you’ll need to go through the hassle of upgrading your electricity meter to a smart, half-hourly meter. Changing your meter is a long process that involves contacting network operators and filing Upgrade to Supply forms that may take time to be approved.
• No room for DIY installations: To be eligible for the Smart Export Guarantee, your solar panels must be installed by an installer credited by the Microgeneration Certification Scheme. This leaves you no room to do the installation yourself, even if you know how to. Otherwise, you will be considered ineligible for the power selling scheme. You can find registered installers in your area by using Find a Builder and typing “solar panel installers” into the postcode search tool.

The amount of money you can earn selling solar power back to the National Grid will depend on several interdependent factors. Some of those factors include:

• The size of your home
• The size and number of your solar panels
• The location of your home 
• The amount of power you generate; and
• The energy supplier under which you register. 

For instance, if you have a three-bedroom house installed with 10 solar panels of 3.5kWp power, you can earn as much as £112 per year.

Your earnings from SEG may also differ depending on location since different areas of the country receive different amounts of sunshine, thereby generating different amounts of energy. 

If you are looking for the best deal for selling solar power back to the National Grid, then you could go with Octopus. 

As of the time of publishing, Octopus Outgoing Fixed tariff had the best SEG rates of 7.5p per kWh of power sent to the grid. However, you have to be their customer to earn this competitive rate. If you’re not their customer, you’ll only get 4.1p per kWh if you register under them. 

Note that you’ll always earn better rates if you export power to the same supplier from which you import it. 

Octopus also has an Agile Outgoing Tariff where customers selling power get paid according to wholesale prices, which are always shifting. 

Tesla is another supplier who offers competitive rates for exporting power to them. If you register for SEG under them, you’ll earn an average of 11p per kWh. However, there’s a catch to this seemingly lucrative offer – you’ll need to purchase a Powerwall 2 solar battery, which costs around £9,000 to buy and install. That means you lose £9,000 from your energy earnings within the 25-year lifespan of your solar panels. 

You wouldn’t need to subtract this large amount from your energy earnings if you opted for a tariff that doesn’t need you to purchase a Powerwall 2 solar battery. Octopus tariff is, therefore, a better deal and will earn you more cash than Tesla Energy Plan.

There are several components in a complete solar power system that work together. (Image credit: Adobe)

The following are some frequently asked questions about selling power back to the National Grid. If you’ve been asking yourself similar questions, you can get the answers here:

How can I sell solar power back to the National Grid in the UK?

You can sell surplus power generated from your solar panels by registering under the Smart Export Guarantee (SEG) through your power supplier. When you register, you’ll get paid for every unit of electricity you feed back to the National Grid.

How much do I get paid for selling solar power in the UK?

The amount of money you can get paid for selling solar power depends on several factors: the size of your home, the size and number of solar panels installed, your location, the amount of power you generate and the energy supplier under which you’re registered.

How is SEG income paid?

SEG income is paid via bank transfer. While some suppliers like ScottishPower pay their customers monthly, others like OVO pay quarterly. Alternatively, you can get paid as deductions from your monthly energy bills if you’re using the same supplier for both energy import and export. 

Can I register for SEG if I’m already earning through FIT?

If you’re already earning under the FIT scheme, you’ll be considered ineligible for the SEG power selling scheme. You can always switch from FIT to SEG if you wish, though you may end up earning lower rates. Note that to claim SEG, you can keep your FIT generator status, but must give up your FIT exporter status.

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