Quick Answer
The SEG requires energy suppliers to pay for excess solar electricity exported to the grid. Rates range from 3-15p per kWh depending on your chosen supplier and tariff.
Detailed Answer
The Smart Export Guarantee replaced the Feed-in Tariff in 2020. While payments are lower, the reduced cost of solar means overall returns remain attractive.
Current SEG Rates
- Fixed rates: 4-8p/kWh
- Variable/agile rates: 3-15p/kWh (time of export dependent)
- Best fixed rates: Up to 12p/kWh from some suppliers
Maximising SEG Income
For most businesses, maximising self-consumption is more valuable than SEG payments. Battery storage can help shift solar generation to evening peaks.
Key Takeaways
- The SEG requires energy suppliers to pay for excess solar electricity exported to the grid.
- Rates range from 3-15p per kWh depending on your chosen supplier and tariff.
Related Questions
Can I claim tax relief on commercial solar panels?
Yes! Commercial solar qualifies for 100% Annual Investment Allowance (AIA), allowing you to deduct the full cost from pre-tax profits in the year of installation. For a £100,000 system, this saves £19,000-£25,000 in corporation tax. This significantly improves ROI.
Are there grants for commercial solar panels?
While most general grants have closed, specific schemes exist for schools (£180m funding pool) and NHS facilities (£100m commitment). The Smart Export Guarantee (SEG) provides ongoing payments for exported electricity. The main financial benefit is the 100% Annual Investment Allowance tax relief.
What is a Power Purchase Agreement (PPA)?
A PPA allows you to have solar installed at zero cost. A third party owns the system and sells you the electricity at a fixed rate, typically 10-15% below grid prices. You save immediately with no capital outlay, but returns are lower than ownership. PPAs suit businesses prioritizing zero upfront investment.
What is the payback period for commercial solar panels?
Most commercial solar installations achieve payback in 3-5 years with current electricity prices. Businesses with high daytime consumption often see payback in under 3 years.
How much can a business save with solar panels?
A typical 50kW commercial system saves 12,000-18,000 annually at current electricity prices. Over 25 years, total savings exceed 300,000 after accounting for installation costs.
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