Selling Solar Electricity Back to the Grid in the UK
Investing in solar panels is not just a smart environmental choice, it can also become a valuable income stream. In addition to reducing electricity bills, solar energy allows you to share the excess you generate with others.
When people start thinking about selling solar energy, many questions come up: “Is it possible to sell solar energy?”, “Can I sell solar power to my neighbour?”, “How do I generate solar energy to sell?”, and many more.
If your solar system generates more electricity than your home uses, you can sell the surplus energy back to the grid. In this post, we’ll explain how that works in the UK, what financial incentives are available, and how to get started.
How Does Selling Solar Energy to the Grid Work in the UK?
When your solar panels generate more electricity than your home needs, that excess energy doesn’t have to go to waste. Instead, it can be exported back to the National Grid. This process is supported by a government-backed initiative that allows homeowners to be paid for the electricity they supply.
In the UK, the main way to sell excess solar energy back to the grid is through the Smart Export Guarantee (SEG) scheme. This programme allows homeowners and businesses with renewable energy systems, such as solar panels, to earn payments for the electricity they export to the national grid. Under the SEG, energy suppliers are required to offer at least one export tariff to eligible solar energy producers.
What Happens to Unused Solar Energy?
When your solar panels produce more electricity than your home consumes, especially during sunny daytime hours, that excess energy doesn't have to go to waste. What happens to it depends on the type of solar system you have:
On-Grid Systems (Connected to the National Grid): In grid-tied systems, any surplus solar energy is automatically exported to the national grid. Through the Smart Export Guarantee (SEG) scheme, you can receive payments for the electricity you send back. This makes it possible to offset your energy costs and contribute to the wider renewable energy supply.
Off-Grid Systems (Independent of the Grid): In off-grid systems, where there’s no connection to the national grid, unused solar energy is stored in batteries. This stored energy can then be used later, such as during the night or on cloudy days, when solar generation is low but your household still needs power.
What Is the Smart Export Guarantee (SEG) Scheme?
The Smart Export Guarantee (SEG) is a UK government initiative that enables households and businesses to earn money by exporting surplus electricity from renewable sources, such as solar panels, back to the National Grid. Introduced in 2020, it replaced the Feed-in Tariff (FiT) scheme, which ended in April 2019, and aims to encourage the adoption of clean energy technologies.
How Does SEG Work?
Under the SEG scheme, certain electricity suppliers, known as SEG Licensees, are required to pay small-scale generators (SEG Generators) for the low-carbon electricity they export to the National Grid, as long as specific eligibility criteria are met.
In other words, if you generate more renewable energy than you use, through systems like solar panels or wind turbines, you can earn money for the excess. To qualify, you’ll need a certified renewable energy system, an MCS-accredited installer, and a smart meter capable of half-hourly readings.
You’re free to compare and choose the best SEG tariff from a range of providers. Some suppliers offer fixed rates, while others base payments on wholesale energy prices.
Who Is Eligible for SEG?
To qualify for SEG, you must:
Have a solar panel system with a capacity of up to 5MW
Install a smart meter or an export meter that accurately measures electricity sent to the grid
Register your installation with the Microgeneration Certification Scheme (MCS)
Use a SEG-licensed electricity supplier
Register your system with your local District Network Operator (DNO)
How Much Can You Earn by Selling Solar Power Back to the Grid?
Selling excess solar energy back to the grid through the Smart Export Guarantee (SEG) can provide a modest income, though the amount you earn will vary. The amount you can earn depends on how much surplus electricity you generate and the tariff rate offered by your supplier.
Typical SEG Rates
SEG export tariffs typically range from 5p to 15p per kWh, though this varies by supplier and market conditions. For example, a household exporting 2,000 kWh per year at 10p per kWh would earn £200 annually. This can go even higher on certain tariffs, such as Octopus flux, which encourages homeowners to export at peak times by offering generous rates.
What Affects Your Earnings?
Several factors affect how much you can earn through the Smart Export Guarantee (SEG). The key elements include how much electricity you export to the grid, the tariff rate offered by your supplier, and whether you use battery storage. Here are the main factors to consider:
Your solar panel system’s size and efficiency
How much electricity does your household use during the day
Whether you have battery storage
The tariff rate you select
Maximising daytime usage of your solar energy reduces export volume, but also reduces your reliance on grid electricity, which can still result in overall savings.
How to Get Started: Requirements for Exporting Solar Energy
To begin exporting solar energy through the Smart Export Guarantee (SEG) scheme, you’ll need a certified renewable energy system installed by a qualified professional, along with a smart meter capable of recording half-hourly readings. Your system must be MCS-certified (or equivalent), and if you’re currently on a Feed-in Tariff (FiT), you’ll need to opt out before enrolling in SEG.
Ready to sell your solar power? Here are the steps you need to take to get set up.
1. Install a Smart Meter
You’ll need a smart meter or dedicated export meter to measure how much energy you send back to the grid. Most energy suppliers can install one for free.
2. Register with the Microgeneration Certification Scheme (MCS)
Your solar panel system must be MCS-certified to qualify for SEG. Most professional solar installers in the UK meet this requirement, but it’s worth checking before signing a contract.
3. Choose a SEG-Approved Energy Supplier
Compare SEG tariffs across different energy suppliers. Look for:
Competitive export rates
Flexible contracts
Payment frequency and methods
Some of the main suppliers offering SEG tariffs include Octopus Energy, British Gas, EDF, and E.ON Next.
4. Apply for SEG Payments
Once you’ve chosen a supplier, submit an application with documentation that usually includes:
MCS certificate
DNO Confirmation of Connection
Meter details
Proof of property ownership or tenancy
Processing times vary, but you should begin receiving payments shortly after approval.
Please note: The MCS certificate and DNO confirmation of connection should be included in your solar installation by your installer. Make sure to check that these will be included before agreeing to a solar installation.
Empowering Smarter Solar Choices with Grid Neutral
Selling solar electricity back to the grid in the UK is a straightforward process that can generate extra income while supporting a cleaner energy system. With the Smart Export Guarantee, homeowners can be rewarded for their contributions to renewable energy, turning solar panels into a source of both sustainability and savings.
Whether you're new to solar or already generating your own power, understanding how to take advantage of SEG is key to maximising the value of your investment, and Grid Neutral is here to help you make the most of it. Contact us today!