Solar panels: How to get paid top rates for electricity you export

Not got solar panels yet? See how they stack up for you and how to get up to £550 off installation in our Are solar panels worth it? guide.

When you got your solar panels installed matters

There are two main schemes when it comes to earning money from your solar panels.

• The Feed-In Tariff (FIT) – which ran between 2010 and 2019, and paid you for generating and exporting electricity.

• The Smart Export Guarantee (SEG) – which started in 2020, and pays you for exporting electricity.

Our handy table explains the differences.

It's worth noting the two schemes didn't overlap – the FIT ended in April 2019, while the SEG started in January 2020, but anyone that had panels installed during this gap can still get the SEG.

If you had solar panels installed before March 2019: should you ditch the Feed-In Tariff?

It's important to understand the FIT (which closed to new applicants in March 2019) is made up of two totally different elements:

• A payment for the electricity you generate

• A payment for what you export

When we talk about ditching the FIT, we're only discussing one of these - the export element.

The FIT payment generating electricity - you CAN'T switch this

The first element of the FIT scheme is the payment you get for ALL electricity you generate – whether you use it or not. This is money from the Government (but paid via an energy supplier) to households in England, Scotland and Wales. The generation payment is income tax-free, guaranteed for up to 25 years and rises with inflation. However, the Government has recently launched a consultation to change the method used to increase these payments each year.

You CAN'T switch this as you don't get paid for this under the Smart Export Guarantee. What's more, you WON'T lose this payment if you do switch away from the FIT for your export payments – you'll continue to get it from your current FIT provider.

The FIT payment for exporting electricity – you CAN switch this

This is a payment for solar energy you don't use that is sent back to the grid (unless you have an export meter, it's assumed 50% of energy produced is exported).

You are free to switch this part of the FIT to a Smart Export Guarantee tariff (and you'll keep the payment for generating electricity). This could be worth doing as you can get more under the Smart Export Guarantee.

However, before you take the plunge, bear in mind that payments under the FIT are guaranteed for 20 or 25 years (depending on when you signed up).

SEG tariffs tend to only last 12 months and the tariffs on offer can change frequently. So if that certainty is important to you, it might not be worth switching from the FIT to SEG.

It's also worth noting that with the Feed-In Tariff, you're free to switch your energy supplier. Like the Smart Export Guarantee, your FIT supplier doesn't need to be the same as your energy supplier.

How do I switch from the Feed-In Tariff to the Smart Export Guarantee?

If you're happy to switch the export element of your FIT to the SEG, we've full info below on how to switch.

Solar panels installed after March 2019? Make sure you're getting the best rate

If you had solar panels installed after the Feed-In Tariff ended in March 2019, then you'll need a Smart Export Guarantee tariff to get paid for the electricity you export.

All providers with more than 150,000 customers are required to offer a SEG tariff, but the rates you can get varies massively. There are four main types of Smart Export Guarantee tariffs...

Type 1: Energy firm fitted your solar panels

You typically get the highest paying rates if the firm fitted your panels (and often a battery) and also supplies your energy.

If so, you can earn between 15p and 25p per kWh for each unit of electricity your export. These tariffs only tend to last 12 months (if you're on one of these, diarise to check it when the higher rate ends).

Clearly you can't switch to these tariffs – it's essentially an introductory offer from the provider if it installs your solar panel system AND it supplies your energy.

Types 2 - 4: Smart Export Guarantee tariffs that you can switch to

While you can't switch to the first type of SEG tariffs, you can with all the others. The other three types are:

• Type 2: Complex tariffs that require you to be with the same supplier for solar export AND energy supply AND have a solar battery.

• Type 3: Those that require you to be with the same supplier for solar export AND energy supply.

• Type 4: Those that offer standalone solar export tariffs.

We've a full list of the rates you can get below.

Should you switch to get a better export rate?

As most providers offer to pay higher rates for your exported electricity if you're an energy customer as well (meaning you get your electricity and/or gas supplied by them too), the key question is – should you switch your supply for a better export rate.

If you're on your provider's standard Price Capped tariff for your energy supply, it's likely a no-brainer - you're not going to pay any more for energy and you can get a better SEG rate.

For those who regularly switch energy provider, the key question is - will the gain from a higher export tariff outweigh any increased cost you pay from not having the very cheapest energy rate (as the cheapest, smaller providers often don't do SEG tariffs), and right now...

• The cheapest energy fix is currently around 12% less than the October Price Cap (see Cheap Energy Club comparison).

• Linked SEG tariffs typically pay three times more than standalone ones.

So, we've crunched the numbers and worked out that if you EXPORT MORE THAN 20% of the electricity you use, even if you're a regular energy switcher, you're best to focus on the top SEG rate.

How to get a SEG tariff

To qualify to receive payments from energy suppliers through the Smart Export Guarantee, you'll need solar panels with a capacity of five megawatts or less, that are certified by the Microgeneration Certification Scheme and have a smart meter that can track how much you export.

You need to apply directly with the SEG provider

If you're getting a SEG tariff for the first time, there are a few hoops to jump through before you can start getting paid for exported electricity:

• Step 1: Choose your SEG tariff. Make sure it's the best tariff for you. Once you've chosen, you'll need to fill in an application form on the supplier's website, or download one and email or post it back.
  
  You'll usually need to provide quite a few supporting documents, including your Microgeneration Certification Scheme (MCS), Flexi-Orb​ or equivalent accreditation certificate and a photo of your smart meter, including an up-to-date meter reading of the energy you export.
  

• Step 2: Get a new 'MPAN' for exporting electricity. This is a unique 'Meter Point Administration Number' for your export meter, that lets you get paid for what you send back to the grid.
  
  Most suppliers will do this for you - but a few do ask you to apply for it yourself. You can do this by contacting your Distribution Network Operator (the companies that look after the wires that transports electricity).
  
  Getting an export MPAN is usually the longest part of the process and can take anywhere between one and four weeks (sometimes longer).
  

• Step 3: Give an export meter reading. Once your MPAN is created, your provider will enrol it on their system. It'll then likely ask for an opening export meter reading before you can start earning.
  
  If you're not an existing customer of the provider, it may ask for payment information at this stage.

It can take anywhere from five to 12 weeks to sign up for your first SEG tariff and start getting paid.

How to switch from the Feed-In Tariff to a SEG tariff

To switch from a FIT to a SEG tariff, first of all you'll need to ask your current FIT provider to opt you out of its export payments - then simply follow the steps above.

It's worth noting you'll need a smart meter to get the SEG, which will record exactly how much you generate and export. Under the FIT, you don't necessarily need a smart meter as you could be on what's known as a 'deemed' export tariff. This assumes you export 50% of what you generate.

This isn't an option under SEG - it'll be based on the exact amount you export, so do factor this into your calculations.

You can switch between FIT and SEG export tariffs once a year – but you can never go back on a deemed FIT rate (where it's assumed you export 50% of what you generate), as having a smart meter means you'll only be paid for exactly what you export under the FIT.

What happens if my provider goes bust?

If the worst does happen and your FIT or SEG provider goes bust, don't panic. Here's what you can do:

If you're on the FIT, you shouldn't lose out on any payments

If you're on a Feed-In Tariff (FIT) and your current supplier goes bust, you'll need to find a new FIT licensee yourself, to continue to be paid under the scheme.

However, Ofgem says you shouldn't be financially disadvantaged if your provider fails. Your new FIT provider is obligated to to cover any shortfall in payments. You can find full details on Ofgem's website.

If you're on the SEG, you won't get paid while you find a new provider

If your SEG provider goes bust, you are responsible for finding a new supplier in order to keep getting paid.

However, unlike the FIT, you won't get any of the SEG payments you'd usually get until you're signed up with a new provider (other providers are not obligated to cover the shortfall). Your new SEG supplier will only pay you for exported electricity from the start of your new contract.