How can you earn money from your solar panels?

Published
January 26th, 2023

Homeowners with solar panels are making money by selling their unused energy – and you should too.

Large energy suppliers in the UK are obliged to pay households for renewable energy they export to the National Grid, under the Smart Export Guarantee (SEG) scheme.

What is the Smart Export Guarantee?

The Smart Export Guarantee is a government-backed initiative that compels large energy suppliers to pay homeowners for renewable energy they send back to the National Grid.

If you produce energy with solar panels, wind turbines, micro combined heat and power, hydro, or anaerobic digestion, you can request payments from one of more than a dozen companies.

This scheme is hugely beneficial to homeowners looking to save money with solar. SEG began in January 2020 as a replacement for the defunct Feed-in Tariff (FiT), but works differently – mainly because it puts the responsibility on consumers to choose the best rate.

It’s especially profitable for anyone with solar panels, because unless you have a solar battery, you’ll likely export half of your power back to the Grid – so why not get paid for it?

How much you could earn?

Octopus offers the best SEG rate, paying out 15p for every kWh of renewable electricity a household sends to the Grid.

This is only available to its own customers, though – it pays other households 4.1p per kWh. Octopus’s Christina Hess explained to The Eco Experts that this was because “it takes a lot of effort to set up an export tariff – the process is therefore quite costly for us.

“However, if a customer also imports electricity from us, we’re more likely to make a margin (please note that due to the current grid set up of network admin, levies and distribution costs it’s usually net negative for us to offer any kind of export tariff).

“This means that we are able to offer a better rate to customers who export and import electricity through us.”

You should also check out Octopus’s Agile Outgoing tariff, which pays you according to shifting wholesale prices.

This tariff has hovered around 20p per kWh over the past 12 months – a fantastic rate – and went above £2 per kWh at one point, according to Energy Stats UK.

Is the Smart Export Guarantee good enough?

The Smart Export Guarantee is a positive development, but goes nowhere near far enough to reward solar households or encourage prospective buyers.

The best Smart Export Guarantee tariff is Octopus’s 15p per kWh offering, while the standard rate consumers pay for electricity is currently 34p per kWh.

That means the Smart Export Guarantee allows companies to buy electricity from you for, at most, less than half of the price they charge you.

Octopus's 15p rate is at least much higher than the Feed-in Tariff’s last export rate, which was 3.8p per kWh when it ended in 2019.

The government rightly stepped in to ensure your unused solar power isn’t sent to the Grid for free, but solar panel owners are still being massively underpaid for the electricity they generate.

What supplier should I choose? 

You can choose any supplier for your SEG tariff.

It doesn’t have to be the supplier that provides you with electricity – so we advise you to find the best rate, and go for it.

Will the Smart Export Guarantee increase?

The Eco Experts contacted all 15 suppliers which provide an SEG tariff, and just two told us they were planning on increasing their rates.

So Energy, which currently offers a 5p per kWh rate, and EDF – which pays just 1.5p per kWh, as we mentioned above – were the only suppliers to commit to a higher tariff.

EDF has made good on this promise – though its tariff for non-customers is still appallingly low – but So Energy hasn't followed through yet.

And regardless, more suppliers need to raise their rates.

Energy companies currently pay households 13% of what their solar energy is worth. That's outrageous.

You should still sign up for an SEG tariff, because otherwise you're leaving free money on the table – but your solar power is worth more than this.

Reference: 

  1. https://www.theecoexperts.co.uk/solar-panels/smart-export-guarantee
  2. https://www.energy-stats.uk/octopus-agile/