Selling excess electricity back to the grid is a smart way for homeowners to make the most of their renewable energy systems.
If you generate more electricity than you consume, your household could be in the money thanks to the Smart Export Guarantee scheme. Although solar panels play a key role in generating and exporting energy, battery storage systems can also be pivotal, allowing you to store excess energy and strategically export it to the grid when tariff rates are highest.
In this article, we’ll explore the ins and outs of exporting electricity to the national grid under the SEG scheme, including how you can maximise your earnings.
What’s the Smart Export Guarantee scheme?
The Smart Export Guarantee (SEG) is a government-backed initiative that was introduced in January 2020. The aim is to provide a financial incentive for households to export their surplus renewable electricity to the national grid. This makes sense – if your systems are generating electricity that’s going to the grid, you should be paid for it.
This initiative is designed to encourage the adoption of low-carbon technologies and reduce grid reliance for clean energy. The scheme is currently available for homes in England, Scotland and Wales, but not in Northern Ireland.
Under the SEG scheme, licensed electricity suppliers with a customer base of over 150,000 have to offer a tariff that pays households for exporting renewable energy. These households are known as small-scale SEG generators.
It’s important to understand that the SEG is not a government subsidy. The availability and rates of SEG tariffs are subject to market conditions and vary between suppliers.
Who is eligible for the SEG?
The scheme is most commonly used for homes with solar panels, but it also covers those who generate energy via wind, micro-combined heat and power (CHP), hydro and anaerobic digestion.
To be eligible for the SEG, households must have an installed capacity of up to 5 Megawatt (MW) for the green technologies listed above, excluding micro-CHP which can be up to 50kW. All installations must be Microgeneration Certification Scheme (MCS) certified.
Taking the example of solar PV panels, the most common renewable energy generator for homes, 5MW is an enormous amount. A typical solar PV array for households will be between 3-5 Kilowatts (kW), which equates to 0.003-0.005MW.
The licensed electricity suppliers have the flexibility to set their own tariff rates, which can be either fixed or variable. Homeowners can choose a SEG tariff from any licensed supplier, regardless of their primary energy provider. However, it’s worth noting that most suppliers tend to offer their best export tariffs to their existing customers.
The only other requirement is to have a metre that can give out electricity export readings every 30 minutes. This will generally be a smart metre.
How does SEG differ from the Feed-in-Tariff?
The Feed-in-Tariff (FIT) was a UK government renewables scheme in place before the Smart Export Guarantee.
Introduced in April 2010, the FIT provided payments to encourage the generation of clean electricity from the renewable energy technologies mentioned above. Unlike the SEG, the FIT was a direct government policy funded by a levy on all energy bills.
The FIT offered two types of payments: a generation tariff for all the electricity produced by a renewable system, and an export tariff for any surplus electricity sent to the grid. These payments were guaranteed for a set period, usually around 20 years, depending on the technology and installation date.
The FIT scheme was open to homeowners, businesses, and organisations that installed qualifying renewable energy technologies. However, it stopped accepting new applications on 31st March 2019, as domestic renewable energy installation had grown and solar energy costs had fallen significantly. If you were part of the FIT before it closed, payments will still be made for the length of your agreement.
Does the SEG work with battery storage?
Battery storage isn’t on the main SEG list as it technically doesn’t generate any electricity, you’re purely storing it instead.
However, it’s a grey area. Battery storage can be a core part of a domestic renewable energy system and can be used in combination with solar panels, which means some suppliers will accept exported electricity from batteries.
On the flip side, some suppliers don’t like energy from batteries as it could have come initially from the grid, making it ‘brown’ electricity rather than fully green. You’ll have to check individual SEG suppliers for their rules.
In theory though, battery storage allows homeowners to strategically export electricity to the grid when SEG payment rates are highest, such as during peak hours.
In the past Tesla has offered a SEG tariff through Octopus Energy, where it paid for exported energy that came through the Tesla Powerwall battery. This tariff was closed in 2023 though.
Benefits of selling electricity back to the grid
The main benefit of selling electricity back to the grid is clear – you get paid for it. But there are other wider benefits too. Here’s a rundown:
- Make money – Selling excess electricity back to the grid comes with a strong financial incentive. As a homeowner, it allows you to earn an additional income. This extra revenue stream can help offset the initial cost of installing renewable energy systems, making your payback time shorter. We’ll go into how much you can earn below.
- Contribute to a more sustainable energy system – As well as just making sense to install your own energy systems, selling energy to the grid incentivises greater renewable energy generation and encourages long-term investment in green energy infrastructure. By participating in the SEG scheme, homeowners are actively contributing to the UK’s transition to a cleaner, lower emissions future and a move away from fossil fuels.
- Freedom to choose your SEG tariff provider – With the Smart Export Guarantee, you aren’t tied to your current mains energy provider. This allows you to search out the best export rates and tariffs. However, there is a catch. Most energy suppliers tend to offer their most competitive SEG tariffs to their existing customers, so it’s always a good idea to check with your current provider first.
You can read more benefits on solar battery storage in general here.
How much can homeowners earn through the SEG?
The good news is that the average solar export tariff is on the rise. Since the launch of SEG in 2020, the average has gone up from 3.15p/kWh to an estimated 9.78p/kWh exported. This trend suggests that homeowners can expect to earn more from their exported electricity in the coming years. It makes the investment in renewable energy systems more attractive.
Today, the amount homeowners can earn through SEG depends on their energy supplier, export rate tariff and the size of their renewable energy system.
There are two main types of SEG tariffs:
- Fixed – This is a set rate that your SEG supplier pays per kilowatt hour (kWh) of electricity your export. This doesn’t take into account time of the day.
- Variable or Flexible – The export rates from a flexible tariff will vary throughout the day. This is tied to demand, with electricity being more expensive at high peak times, such as in the evening.
To give you an example of potential earnings, let’s say you have a 5kW solar panel system that generates an average of 3,500 kWh per year, which is roughly the UK average electricity household use.
If you export 50% of this electricity at the average rate of 9.78p/kWh, you’ll earn roughly £171 per year through the SEG. However, you can get much higher rates than this average.
Accessing the best SEG rates
To bump this annual earnings figure up, you can access much better rates than the UK average export rate.
Octopus Energy are the market leader with SEG tariffs and green energy. They offer a range of different tariffs to suit household needs and scenarios.
The standard Octopus SEG tariff for non-customers is 4.1p for every kWh of electricity exported. To all accounts, this is very low. However, if you’re an Octopus customer as your mains energy supplier, you’ll get 15p per kWh on their outgoing tariff. There’s also an ‘Agile Outgoing’ Octopus that matches your half-hourly prices with day-ahead wholesale rates.
If you have solar panels and a storage battery though, you get access to get better rates.
The best value export tariff is the Intelligent Octopus Flux. This is available for homeowners with solar panels and a GivEnergy battery (at the moment). The Intelligent Octopus Flux is designed to optimise both your import and export rates, helping you to buy cheap and sell high. The peak rate to sell your electricity to the grid here is at peak demand between 4-9pm. The smart technology takes care of all of this for you automatically.
In my postcode area on Intelligent Octopus Flux I’d get:
- Peak export rate: 29.6p per kWh
- Off-peak export rate: 22.2p per kWh
The Octopus Flux is the next best option for importing and exporting energy. This works with all solar panels and battery systems.
It’s another variable tariff allowing you to access cheap energy between 2-5am, allowing you to charge up your battery. On Octopus Flux, the best time to sell your excess energy to the grid is between 4-7pm.
In my area on Octopus Flux I’d get:
- Peak export rate: 24.99p per kWh
- Off-peak export rate: 5.26p per kWh
- Day rate export: 14.85p per kWh
Other companies offer competitive rates. For example, OVO Energy has an export rate of 20p per kWh. However, you have to be an OVO customer and buy into its solar package. If you’re not an OVO customer, the basic export rate is 4p/kWh.
How to maximise your electricity export earnings
To get the most out selling excess energy back to the grid, you can use a combination of the tips and best practices below:
- More solar panels – The larger your solar PV array, the more energy you will be generating. Of course, this will cost more initially.
- Good sized battery storage system – Investing in a battery system with a high storage capacity means you can store and provide power for your own home, as well as exporting excess energy to the grid when the time’s right. With a battery system, you can also access better tariff rates with certain suppliers.
- Shop around for the best rates – Your import electricity supplier can be different from your SEG partner, but as we’ve seen, the best rates are often saved for the supplier’s own customers. So unless you’re with the best supplier currently (Octopus Energy) it’s likely you’ll have to change your primary energy supplier to get access to the best rates.
- Smart systems to optimise exports – Smart systems are the way forward. A good smart export tariff, like the ones from Octopus, automatically optimise your battery’s charging and discharging schedule so you can maximise your export earnings. You can also use smart meters and apps to track your energy production, consumption and export in real-time.
- Energy-efficient practices – By reducing your overall energy consumption at home, you’ll not only save money, but be able to export more to the grid. Try to shift your energy usage to off-peak hours when electricity is cheaper. You’ll want to prioritise using your own generated electricity first before exporting to the grid.
SEG supplier list
Here’s a list of licensed SEG suppliers from 1st April 2024 to 31st March 2025:
- British Gas
- E Energy
- E.ON
- EDF
- Good Energy
- Rebel Energy
- Octopus Energy
- OVO
- Pozitive Energy
- Scottish Power
- SO Energy
- Utilita Energy
- Utility Warehouse
Setting up your system for SEG
To start selling your excess electricity back to the grid and benefit from the Smart Export Guarantee, you’ll need to ensure that your renewable energy system is set up correctly and registered with an SEG licensee.
The basic equipment needed for SEG participation is relatively straightforward. You’ll need a renewable energy system, such as solar panels, and a smart metre to accurately measure the amount of electricity you export to the grid. The smart metre is essential for tracking your exports and ensuring that you receive the correct payments from your SEG licensee.
It’s then a process of contacting an SEG supplier that offers export tariffs in your area and requesting their SEG application form.
If you already have solar panels installed, you’ll have to provide the necessary documentation, proof of a valid MCS certificate and confirmation that you have a smart metre installed.
Once submitted and your application is approved, you can begin exporting excess electricity to the grid and receiving payments.
