Solar Panels and the Smart Export Guarantee, Selling Electricity Back to the Grid

What Happened to the Feed-in Tariff?

The Feed-in Tariff (FiT) scheme closed to new applicants in March 2019. It had been the main government incentive for homeowners to install solar photovoltaic (PV) panels, paying both a generation tariff (for all electricity produced) and an export tariff (for surplus electricity sent to the grid). Homeowners who registered under FiT before closure continue to receive payments for the duration of their contract.

For anyone installing solar panels after March 2019, the replacement mechanism is the Smart Export Guarantee (SEG), introduced in January 2020 and overseen by Ofgem.

How the Smart Export Guarantee Works

The SEG requires larger licensed energy suppliers (those with 150,000 or more domestic customers) to offer at least one export tariff to eligible small-scale generators. Under SEG, you receive a payment per kilowatt-hour (kWh) for every unit of surplus electricity your solar panels export to the National Grid.

Unlike the old FiT, SEG does not pay you for all electricity generated, only for what you actually export. This means your self-consumption (the solar energy you use directly in your home) reduces your import bill separately, while exported surplus earns the SEG rate.

SEG Eligibility Requirements

To qualify for SEG payments, your installation must meet the following criteria:

SEG Tariff Rates

Unlike FiT, the government does not set a minimum SEG rate, suppliers compete on the tariff they offer. Rates vary considerably between suppliers and are subject to change. Most commonly offered tariffs range from a few pence per kWh upward, though some suppliers offer variable rates linked to wholesale electricity prices (sometimes called Agile or time-of-export tariffs), which can be substantially higher during peak demand periods.

It pays to compare SEG tariffs when registering and to review your tariff periodically, as you are free to switch SEG provider independently of your main energy supply contract.

Impact on EPC and Property Value

Solar PV panels improve a property's EPC rating, typically moving a home up one or two bands depending on the system size and the property's existing rating. A higher EPC band can make a property more attractive to buyers and mortgage lenders, particularly as minimum energy efficiency standards for rental properties tighten.

Surveyors and estate agents commonly note solar panels as a positive feature. However, the impact on market value varies by location and buyer profile. Properties with panels subject to a roof lease (where a third-party owns the panels) can be more complicated to sell, so it is worth confirming ownership of the installation before marketing.

Property Passport UK displays EPC data including renewable energy features for every property it indexes, giving buyers a clear picture of installed low-carbon technology.

Practical Considerations

• Solar panels require periodic maintenance and inverter replacement (typically every 10–15 years)
• Inform your buildings insurer when panels are installed
• Check whether your roof is structurally suitable and confirm planning permission requirements (most domestic installations are permitted development)
• If you sell your home, SEG payments can be transferred to the new owner or cancelled, discuss with your SEG supplier at the point of sale