Selling Electricity Back To The Grid: How Does It Work?

As the world transitions towards renewable energy, solar panels have emerged as a popular choice for many homeowners. If you already have a solar PV system installed on your property, have you ever wondered what happens to the excess energy your panels generate?

Instead of letting your surplus electricity go to waste, you have the opportunity to sell it back to the National Grid, which is mutually beneficial for both you and the energy network. But how oes the process work?

Well keep reading because in this blog, we take a closer look at selling electricity back to the grid, including how it works, the benefits of doing so, and how you can take advantage of this opportunity.

Can you sell electricity back to the grid?

The short answer to this question is yes, you can, and this is made possible through government-backed initiatives, such as the Smart Export Guarantee (SEG). These initiatives encourage the uptake of installing renewable energy sources, like solar power, to homes across the UK.

To be able to sell renewable electricity back to the grid, there are some eligibility criteria your renewable energy system must meet. Some of the key eligibility criteria include:

• You must have a specific type of renewable energy technology – this includes solar PV, wind, micro combined heat and power (micro-CHP), hydro, or anaerobic digestion (AD).
• Your system must be Microgeneration Certification Scheme (MCS) certified – this ensures your system meets quality standards and has been installed correctly by qualified professionals, like Eco Providers.
• Your system’s total installed capacity must not exceed 5MW – this is to make sure that the scheme is accessible to individual homeowners and small-scale energy producers.

As well as meeting the above eligibility criteria, you’ll need some key equipment installed in addition to your renewable energy system. This includes:

• An export meter – this is essential to measure the amount of electricity you’re sending back to the grid. It will ensure that it accurately records the surplus energy, so you can receive accurate payments from your energy provider.
• A battery storage system – while this isn’t mandatory, a battery storage system can optimise your earnings. When you store excess energy during times of low demand, you can sell it back when tariffs are higher.

If you’re thinking about selling electricity back to the grid, we’d recommend speaking with a professional renewable energy installer, like Eco Providers, to discuss your renewable energy requirements in more detail. We can help you determine the right solar PV system and set up for your needs.

The Smart Export Guarantee explained

The Smart Export Guarantee (SEG) lies at the heart of selling electricity back to the grid. Introduced in 2020, this government initiative states that energy suppliers with a certain number of customers must offer at least one tariff to eligible individuals to allow for renewable electricity to be sold back to the national grid.

It’s a crucial scheme that enables homeowners to receive payments for the renewable electricity they generate and export to the grid. The exact payments you may receive will depend on a number of factors such as the specific tariff offered by your chosen supplier, the terms of rates, contract lengths, and payment frequencies for example. 

Essentially, the SEG offers a financial incentive for homeowners who generate their own renewable energy. However, it’s important to make sure you compare different offerings to find an SEG tariff that best suits your needs.

What are the benefits of selling electricity back to the grid?

Selling your home’s surplus electricity to the grid comes with a range of benefits if you have solar panels or other renewable energy sources. Below are just some of those benefits.

Extra source of income

As we’ve mentioned previously, selling excess electricity can generate an extra source of income, and through schemes like the SEG, it allows you to maximise your return on your initial investment of your system. And once your system is all set, your surplus electricity is automatically exported, meaning you don’t have to do anything to earn your income.

As well as that, not only are you receiving regular payments for your surplus electricity, you’re saving money on your electricity bills by generating your own energy. This means you’re making long-term savings and generating an income at the same time. 

Reduced carbon footprint

Beyond financial gains, selling your excess electricity contributes to a greener future. By feeding renewable energy into the national grid, you’re reducing your reliance on traditional fossil fuels, which are major contributors to greenhouse gas emissions. This ultimately reduces your carbon footprint as your demand for non-renewable energy sources is lowered.

By generating your own electricity and exporting it to the grid, you’re also contributing to sustainability as you’re promoting energy independence. This also helps towards reaching national renewable energy targets set by the UK government.

Contribution to a more stable and reliable energy grid

When you sell surplus electricity, you’re doing more than just reducing your carbon footprint – you’re playing a part in a more reliable and stable energy network. By diversifying energy sources, the national grid becomes less susceptible to disruptions such as fluctuations in energy prices or power cuts.

Solar energy enhances energy resilience and during times of peak demand, the surplus electricity you provide can alleviate strain on the grid, preventing potential outages and ensuring a consistent energy supply for everyone. This allows for you to become an active player in building a more robust and sustainable energy future for your community.

How to sell electricity back to the grid

Selling electricity back to the grid is a fairly straightforward process. It starts by ensuring you have a compatible renewable energy system that meets the eligibility requirements we shared earlier. If you meet this criteria, the next step is to shop and compare different SEG tariffs.

When searching for different tariffs, it’s important to ensure they meet your exact requirements. For example, be sure to consider factors such as the tariff rates, contract terms, payment frequencies, and any other additional incentives they might offer. Thoroughly researching all of your options ensures you get the most out of your exported electricity.

Once you’ve compared different suppliers and tariffs, and you’ve reached your decision, you can go ahead and apply. You can often do this quickly and easily online, but you may need some important information to hand such as:

• Information about your renewable energy system
• Its MCS certificate number
• Installation date
• Expected export capacity

After your application has been reviewed and approved, the energy supplier should guide you through the final steps, including the installation of an export meter. Once everything is set up, you can start earning money for the renewable energy you export to the grid.

Thinking about installing solar power?

Selling electricity back to the grid is not just a way to earn extra income through schemes like the Smart Export Guarantee, but also a sustainable choice for our environment. It’s a great opportunity to play a part in promoting renewable energy and contributing to a more resilient and stable energy network.

If you’ve been thinking about installing solar power to your property, don’t hesitate to contact us today. We’re MCS registered and fully qualified to install a solar PV system to your home, helping you become more energy efficient and save you money in the long run. Take the first steps to a greener future and get a free solar quote today.