Solar panel sales are up – but NOT the price energy companies charge you for electricity: Electricity prices are for electricity generated by households

Sky high energy prices have led to an increase in demand for solar panels, but buyers should not expect to make a profit selling power back to the National Grid.

Figures from trade association Solar Energy UK show there has been an increase in the number of panels being used to generate electricity at home as well as making money from selling any excess back into the grid. .

More than 3,000 solar systems are installed per week, up from 1,000 per week in July 2020.

There are three solar powered attractions. First, it is environmentally friendly. Second, you can cut your electricity bill and third, you can sell the excess electricity.

Making your own electricity can definitely cut your bills. A typical 4kW solar panel system can generate around 3,500 kilowatt hours (kWh) a year in most parts of the UK – with the exact amount depending on the amount of sunshine hours. That same amount of energy will cost just £1,260 when the Government’s new price cap of £2,500 comes into effect.

The problem is making money from your panels. If they produce more electricity than you need, the excess can be sold through the grid.

Energy companies pay for the electricity you feed through the Smart Export Guarantee (SEG). But you have to sign up for a SEG tariff, otherwise the grid will get your excess electricity for free. And the tariffs are not good value. The best price you can get on a standard SEG tariff is 7.5p per kWh (see table). Even that is 73 percent below what companies charge for electricity.

Ben Whittle, a senior consultant at the Energy Saving Trust, said: ‘We agree with calls for homes with solar panels installed to be fairly rewarded for providing lowcarbon electricity to the grid. ‘

Despite the rise in electricity prices over the past 12 months, what companies pay you for the energy you generate has remained largely unchanged.

Most companies are still paying roughly the same rates as two years ago. However, there are ways you can reduce the lower SEG tariff. First look at switching energy companies, because SEG tariffs are different.

The best SEG rates are paid by those who buy their energy from the same company they sell it to. For example, Octopus pays its own customers 7.5p, but if you use another company for your energy supply, you will only receive 4.1p per kWh. Therefore, it is worth seeing if you can transfer your energy supply to the company that buys your electricity to increase your SEG rate.

Prices range from 1.5p per kWh from EDF for non-customers – it offers 5.6p to its own customers – to 7.5p per kWh from Octopus Energy for its own customers. Assuming you export 500kWh a year to the National Grid, the difference between the best and worst rates adds up to £30.

Alternatively, you can choose Octopus Energy’s Agile Outgoing export tariff. Your electricity bill will change every 30 minutes depending on the wholesale market price. This can lead to bumper returns.

The company told The Mail on Sunday: ‘On average, customers on this tariff have been charged up to 28.37p per kWh over the last three months.’

To get the agile rate you will need a smart meter that can send data every 30 minutes. Another option is not to sell your excess electricity, but to store it.

Whittle says: ‘With prices rising, households with solar panels can make bigger savings using the energy they produce themselves – and a battery can make a difference.’

Batteries aren’t cheap – you can expect to pay between £1,200 and £6,000 depending on the size – but if it means you can use more of the electricity you generate and get a lower bill from your supplier, it could be one profitable investment.

Whittle added: ‘In all cases, having a battery will lead to more savings than just having panels, but whether the amount saved justifies the cost of installation will depend on many factors, including how much excess electricity your panels are generating.’

On Friday, So Energy said it would increase the SEG tariff ‘in the appropriate course’. EDF said it continuously reviews its prices ‘to ensure they remain competitive’.