What is the Current System for Selling Surplus Domestic Solar Power in the UK?
In the UK, households with solar panels or other low-carbon generators can sell surplus electricity back to the grid under the government-backed Smart Export Guarantee (SEG) scheme. Introduced in 2020 as a replacement for the Feed-in Tariff (FiT), SEG requires licensed electricity suppliers to pay small-scale generators for exported electricity, supporting the growth of renewable energy. However, unlike the FiT, SEG does not set a fixed government-backed rate. Instead, suppliers independently set tariff rates, contract lengths, and payment terms for exports, which must only be above zero to comply with regulations.
This means the price paid for surplus exported power can vary widely depending on the chosen supplier and tariff, and there is no uniform guaranteed price across the market. For example, from 2024-2025, SEG export rates have ranged from as low as 1p/kWh to as high as 25p/kWh, depending on the supplier and contract type.
How the Lack of a Guaranteed Price Impacts Solar Panel Owners?
The absence of a government-backed fixed export price creates uncertainty for solar homeowners and small-scale renewable generators. Unlike the FiT, which guaranteed a fixed export tariff for 20-25 years, SEG tariffs can fluctuate, often leading to lower and unpredictable income streams from surplus power sales. Homeowners must shop around to find the best export rate and may experience changes in payments if suppliers adjust tariffs or discontinue offers.
This variability reduces the financial attractiveness of investing in solar PV systems or battery storage for self-consumption optimisation. Many solar owners find that export payments only cover a small portion of the system’s upfront cost, especially with current lower SEG rates widely between 3p and 6p per kWh.
Why a Government-backed Guaranteed Export Price Matters
A guaranteed export price system provides stability and confidence for households investing in renewable technologies. The original Feed-in Tariff’s fixed contract and pricing structure offered security that helped fuel rapid solar adoption between 2010 and 2019, driving almost one million domestic solar installations across the UK.
Without such guarantees under SEG, the risk associated with fluctuating export revenues may deter new solar installations or limit upgrades like battery storage systems, slowing progress towards net zero goals. Stable revenues also encourage better financial planning and more widespread community adoption.
How Low and Variable SEG Rates Affect UK Renewable Energy Targets
The UK's legally binding net zero target for 2050 and ambitions to expand domestic renewable energy face challenges when export incentives lack clarity or generosity. The reduced financial returns from selling surplus power create a market barrier to maximising home solar system efficiency and energy flexibility, such as smart export and demand response.
As domestic solar capacity grows rapidly with over 1.7 million installations, incentivising owners to share excess clean energy effectively is crucial for grid stability and renewable integration. Without a guaranteed price, solar owners may prioritise self-consumption or local battery storage over exporting, which helps but limits the grid’s access to distributed renewable energy.
What Alternatives Exist for Solar Owners to Maximise Returns Without a Guaranteed Price?
Many UK households turn to battery storage to increase self-consumption of solar power, reducing dependence on export revenues. Using systems like Tesla Powerwall or other home batteries, owners can store excess energy for evening use, maximising bill savings despite low export payments.
Additionally, some energy suppliers offer premium or fixed SEG tariffs to attract solar customers, but these tend to have contract restrictions or shorter durations. Solar owners frequently switch providers to chase better export rates, creating market fragmentation.
Community energy schemes and peer-to-peer trading platforms are also emerging to help solar generators receive better value for surplus power locally, bypassing traditional grid tariffs.
Industry bodies, installers, and renewable advocates urge the government to revisit the SEG’s structure to introduce more stable and attractive export tariffs. They argue for reinstating a form of guaranteed pricing or longer contract terms to reassure consumers and stimulate greater investment in solar plus storage technologies.
Such reforms would drive faster progress toward clean energy adoption, energy independence for homes, and improved grid resilience. Transparency and ease of switching between tariffs are also priorities to ensure fair competition and consumer choice.
How Atlantic Renewables Supports Solar Owners Navigating the Current Export Market
Despite the uncertainties of SEG tariffs, Atlantic Renewables’ team of experts offers advice on optimising solar and battery storage systems for maximum financial and environmental benefit. We design battery solutions for self-consumption, and provide professional installation and aftercare.
Homeowners looking to benefit from solar panel installations should contact Atlantic Renewables on 0161 207 4044 to speak with our engineers about solutions tailored to the current market. Let us help you make the most of your renewable energy investment.
Get in touch
If you are interested in unlocking the full potential of your solar PV system despite fluctuating export prices, Atlantic Renewables can help guide you through the complexities of the Smart Export Guarantee and battery storage integration. Call us today on 0161 207 4044 and start maximising your home’s clean power savings.
