How to sell your surplus solar energy back to the grid
What’s surplus solar energy?
The sun is a renewable source of energy, and as technology continues to advance, we’ve found ways to harness its power and bring it into our homes and businesses. Indeed, more and more homeowners are generating their own electricity through solar power.
However, sometimes your solar panels might generate more energy than you can use in your home. Surplus solar energy refers to the excess energy that’s produced by a solar panel system when it’s not being used by the property that it’s installed on. This excess energy can be sold back to the grid, where it can be used by others.
Thanks to increasing efficiency and decreasing costs, more of us are turning to solar power, and selling surplus solar energy is just another step in the right direction towards a more sustainable future.
The Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) is the UK Government scheme which means you can get paid for feeding back any renewable electricity you generate and don’t use. You will be paid for every unit of electricity you send to the grid.
The scheme requires all licensed electricity suppliers with 150,000 or more customers to offer at least one export tariff to those who meet the criteria, but it’s best to shop around to find the best SEG tariff, as the price you’ll be paid for energy does vary. Smaller energy suppliers do offer tariffs on a voluntary basis too. Make sure to ask about export tariffs before signing any contracts with a supplier.
SEG eligibility requirements
There are five eligible low-carbon technology types for the SEG:
- Solar photovoltaic (solar PV)
- Micro combined heat and power (micro-CHP)
- Anaerobic digestion (AD)
Further eligibility requirements for installations also require that they must:
- Be located in Great Britain
- Have a total installed capacity of no more than 5MW, or no more than 50kW for micro-CHP
- Be installed by a company certified through the microgeneration certification scheme (MCS) or equivalent
- Be attached to a meter capable of providing half-hourly export readings (typically a smart meter)
You also can’t be currently receiving export payments under the Feed-in Tariff scheme, an older incentive scheme.
How to sell surplus solar energy
Firstly, you need to apply directly to a SEG tariff supplier. Ofgem lists all the energy suppliers that provide these tariffs and it’s worth noting that you don’t have to choose the same supplier that provides your energy.
It’s up to you to determine which tariff is best for you. You’ll have to consider factors such as fixed or variable tariff, length of contract, and the price paid rate per kWh of electricity. Be sure to compare suppliers; each will have details of their specific application process on their website. For example, not all tariffs will pay for electricity stored in a battery and then exported to the grid (sometimes referred to as brown electricity).
The only requirement for electricity suppliers is that any SEG tariff offered must always remain above zero and they have to offer payments based upon actual meter readings if you choose that option.
We advise anyone choosing an SEG tariff to continue to review their options regularly as prices do change.
The benefits of selling excess solar energy
Not only does greater energy independence help to save money, but solar panels are efficient and produce a lot of energy. There are benefits to selling this power, including:
- Earning money on renewable energy you won’t use, helping you to achieve a return on your investment in solar panels sooner.
- Contributing to greater use of renewable energies that will generate a positive effect on the environment and reduce our dependence on fossil fuels.
Self-consumption vs. selling energy
Self-consumption is a term that’s becoming more and more familiar – it simply means consuming your own energy, rather than relying on the grid. It’s happening more with solar power as many households realise photovoltaic solar self-consumption is a very economical solution, achieving considerable energy savings of around, on average, £79 each month without a battery, and £118 a month with one.
Not only can households rely less on the traditional energy system, homes with solar panels producing a surplus of energy will be able to take advantage and sell this energy.
In order to maximise self-consumption, a battery is recommended to store any solar energy which is produced and not used throughout the day. This can then be used to provide a guaranteed supply of energy after sundown, during periods of peak energy demand, or in the event of a power outage. You can’t always sell stored energy under SEG, however. Solar storage is only covered by the SEG in some instances, so you have to check with suppliers.
There’s still plenty of benefits to having a battery, though. The rates consumers pay to get energy from the grid is generally higher than the rates paid to sell energy, so it makes sense to use the electricity your panels have generated where possible. That means there’s less need to import from the grid at a cost higher than you’d get for selling your energy.
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How much can I sell my electricity for?
The amount you’ll be paid for selling solar power back to the National Grid through the Smart Export Guarantee will vary depending on the tariff you choose. It could be between 1p/kWh to 24p/kWh – the best rate available at the time of writing. Rates do change, though, so it’s always worth looking at the latest tariffs.
Is it worth selling electricity back to the grid?
You will find that the rates paid don't match up to the costs of energy bills. But if you’re generating more electricity than you use, it’s definitely worth exporting it back to the grid and receiving payment for doing so. This energy can then be used by households which might otherwise use exhaustible forms of energy like coal and natural gas.
How often will I receive payment from my SEG tariff?
This will depend on the payment cycles of your chosen supplier, but it can be from every three months to once per year. It’s important to check when payments are made before committing to a SEG tariff.
What happens if I’m already receiving FIT payments?
You cannot receive both Feed-in Tariff payments and a SEG tariff. Since the FIT scheme includes generation tariffs, you’ll typically make more money if you stick with the FIT scheme. Once your contract is over, you can then switch to the SEG.