Should your business use solar electricity or export it?

Compare the import cost avoided by using solar with the payment available for exporting it. Eligible Great Britain solar installations up to 5 megawatts can investigate SEG export payments [S1]. Your contract and demand timing determine the result. Separate cash receipts from avoided purchases, deduct operating costs and compare funding terms using the same energy flows. Checked October 2026.

Last checked 16 October 2026

What is solar self-consumption, and how does it differ from export?

Self-consumption is solar electricity used at your premises. Export is electricity sent to the network. A kilowatt (kW) measures power; a kilowatt-hour (kWh) measures energy. Track the energy flows separately before assigning financial value. The same unit cannot replace a grid purchase and be sold as export at the same time.

Ask for time-matched consumption and generation calculations. PVGIS, the European Commission’s solar modelling tool, estimates production for a grid-connected system without battery storage [S2]. It does not by itself show your site’s electricity purchases or export income. Read solar sizing before accepting a fixed self-consumption percentage.

Is using solar electricity worth more than exporting it?

Compare your actual avoidable import unit cost with your available export rate. Where the former is higher, direct use has more value per unit. Keep standing charges and costs that do not change with consumption out of the avoided-unit calculation. Ask your supplier which components of your bill would actually change.

The Smart Export Guarantee, or SEG, offers eligible generators payments through participating suppliers. Rates and contract lengths are supplier-set [S1]. Obtain written terms for your business rather than using a domestic headline tariff. Explain uncertain future rates through sensitivity cases instead of extending today’s offer across the whole equipment life.

What could your site earn, and how long is the payback?

This is an illustration, not a quote. All costs, tariffs, shares, yield and operating patterns below are assumptions, not market benchmarks or partner offers. It isolates consumption overlap while holding generation constant. No grant, tax relief, borrowing cost or future replacement is included. Amounts exclude recoverable VAT; check your position with your accountant.

For self funded, net value combines avoided purchases and export cash, less annual costs. For the hypothetical funded contracts, assume the provider sells direct-use solar to the host at £0.25/kWh, receives export receipts, deducts £600 and pays the host its stated share. The host therefore has no separate unit-price saving under those funded assumptions. This settlement structure is assumed solely to make the comparison reproducible. It is not a claim that funded solar contracts normally pay these shares.

Gross value = direct-use kWh × £0.25 + exported kWh × £0.06. Net value = gross value − £600. For the mid case: 27,000 × £0.25 + 18,000 × £0.06 − £600 = £7,230/year.

Annual host result = net value × host share. Simple return on investment (ROI) = annual host result / host capital × 100. Simple payback = host capital / annual host result. Ranges below reflect the stated capital range; they are not confidence intervals.

Fully funded has no host capital to recover in this illustration; report annual cash income rather than an infinite ROI. Self funded income is not all cash: the mid case comprises £1,080 export receipts plus £6,750 avoided purchases, less £600 operating costs. Check solar payback for the wider appraisal questions.

Which funding model fits your site?

HMRC treats solar panel expenditure as special-rate expenditure [S3]. Check applicable relief with your accountant; the illustration excludes tax effects rather than assuming a particular claim.

Fully funded transfers capital and equipment operation to the provider, while you provide the agreed site rights. Part funded shares the capital and requires clear ownership and settlement terms. Self funded leaves you paying the capital and retaining the net result after costs. Compare written offers against the same energy model.

Ask how a power purchase agreement affects the price of solar used on site, export ownership and any host rent. Many commercial structures will differ from the illustration. Recalculate the whole host cash flow, including payments to the provider. Read funded versus owned solar.

Have your solicitor check roof rights, maintenance access, lease length, insurance, exit payments and removal. Ask who funds repairs and any business rates liability. Do not assume these costs disappear because someone else owns the equipment.

Should you add a battery before exporting surplus?

Model it as an additional investment. Compare useful stored output with foregone export income, storage losses and incremental costs. Ofgem’s storage guidance also requires attention to the origins and metering of exported electricity [S4]. Read battery tariff arbitrage before combining the calculations. Keep battery trading and solar export value separate so the same energy is counted once.

What should you do next?

Request interval demand data, a generation model, a business export offer and itemised funding terms.

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