How Does Net Metering Work for Large Businesses?

Key takeaways

• Net metering, where exported power is credited against your bill unit for unit, doesn't exist in the UK. It's mostly an American scheme.

• UK businesses are paid for exported solar through the Smart Export Guarantee (SEG) or an export power purchase agreement (PPA), usually at a fraction of what they pay for grid power.

• Because exported power earns far less than imported power costs, the solar you use on site is worth roughly two to five times more than the solar you export.

• The best commercial systems are designed around self-consumption first, with export as a useful top-up rather than the core of the business case.

Having worked on multiple projects that involved input from stakeholders that are based outside of the UK. There is often confusion about how the energy market both supports and restricts the economic advancements of onsite energy projects such as behind the meter solar. This leads to an education of both our clients but also ourselves.  Needless to say the UK setup is relatively unique to the UK, however the conversation that triggered the publishing of this piece was actually spawned by a UK based business reading information about the US in the process of swatting up on their project, so it is feasible that it could catch many others out. So let's clear it up once and for all...

What is net metering?

Net metering is a billing arrangement, common in the United States, where every unit of solar electricity you export is credited against a unit you import later. In effect, the grid acts as a free battery: your meter runs backwards when you export, and you're billed only for your net consumption over the billing period.

The appeal is obvious. Under net metering, a kilowatt hour sent to the grid at midday is worth exactly the same as a kilowatt hour bought back at 6pm. That makes the timing of your generation almost irrelevant, and it's why so much online content (most of it American) treats exporting as just as good as using your own power.

That assumption doesn't apply in the UK, and building a business case on it will leave you in hot water.

Does net metering exist in the UK?

No. The UK has never had a true net metering scheme for businesses. Exported and imported electricity are measured separately and priced separately. You pay your supplier's rate for every unit you import, and you're paid what is often a much lower, separately agreed rate for every unit you export.

UK schemes pay only for export, not unit-for-unit bill credits. The closest the UK came was the Feed-in Tariff (FiT), which paid for generation and an assumed share of export, but it closed to new applicants on 1 April 2019. Some FiT-era guidance is still online and is often mistaken for the current scheme.

Today, the two main ways a business gets paid for exported solar are the Smart Export Guarantee and an export PPA. Some businesses also avoid exporting altogether by selling power directly to an on-site user through a private wire PPA. All three are covered below.

How does solar export work for UK businesses?

A commercial solar system powers your building first. Only the surplus, generation above your site's demand at that moment, flows to the grid through an export meter (this is often a reconfiguration of your current import meter to allow 2 way flows). Your chosen export buyer then pays you for those metered units, usually under the Smart Export Guarantee, for systems up to 5MW or under a negotiated export PPA.

The mechanics are straightforward once you separate the two metering functions in your head:

• Import. Every unit you buy from the grid is billed at your supply contract rate, including network charges and levies.

• Export. Every unit you send to the grid is recorded on a separate export register with its own export MPAN (meter point reference). Payments are settled against that export MPAN.

• Half-hourly metering. Most commercial sites already have half-hourly meters. SEG requires metering that records export in half-hourly intervals, and the supplier arranges it if it isn't in place.

Under the Smart Export Guarantee, licensed suppliers must offer export tariffs to solar PV generators up to 5MW. Suppliers set the rate, contract length and other terms, and the only legal floor is that the rate must stay above zero. You don't have to export with the same company that supplies your import.

Before any of this, a commercial system needs DNO approval under G99 to connect and export, and the DNO may cap how much you're allowed to export.

Why is self-consumed solar worth more than exported solar?

Every unit of solar you use on site avoids buying a unit from the grid at your full import price, typically 20p to 30p per kWh for a business. Every unit you export earns only the export rate, typically 4p to 12p. So self-consumed solar is usually worth two to five times more than exported solar.

This is the single most important point for anyone used to thinking in net metering terms. Industry analysis puts the gap at roughly 20p–30p avoided import cost against a 4p–12p export credit. One UK business guide gives a worked example: an avoidable import cost of 24p/kWh against an SEG rate of 8.5p/kWh.

The real comparison has a few wrinkles. Standing charges stay the same whatever you generate, VAT may be recoverable, and some network charges don't scale directly with consumption. But the direction is clear: maximising sensible self-consumption nearly always beats maximising export.

How much can a business earn from exporting solar?

Export income for a commercial system is usually a few thousand pounds a year: useful, but secondary to bill savings. As an illustration, a 250kWp system using 80% of its generation on site might export around 49MWh a year, worth roughly £3,900 at 8p per kWh. The self-consumption savings on the same system are far larger.

That example comes from published industry analysis and assumes an 8p average SEG rate. The same source estimates self-consumption savings of £35,000 to £50,000 a year on that system, which shows where the real value sits. It also warns against building a finance case on a headline SEG rate. The highest published rates are often domestic products that require you to move your import supply, and they reprice. The source suggests stress-testing export income at 3p–5p per kWh.

SEG vs export PPA vs private wire PPA: which is right for your business?

The Smart Export Guarantee suits most smaller commercial systems because it's simple and flexible. An export PPA can pay more for larger systems with significant surplus. A private wire PPA is different: a third party funds and owns the solar, and you buy the power it generates on site at an agreed price, usually below grid rates.

You don't need to exceed 5MW to consider an export PPA. Some export buyers work with smaller commercial assets, and a negotiated deal may offer a better price or longer-term certainty. SEG may still win where simplicity and short commitments matter more.

Private wire PPAs avoid many of the grid charges and pass-through costs added to imported electricity. That's why they can deliver a price below grid rates. Eden offers this model and will often use the remaining export to better the PPA rate offered. The government has also recently sought evidence on barriers to corporate and private wire PPAs, so this is a space to watch.

What are the common problems with solar export for businesses?

The most common problems are an unregistered export MPAN, so surplus flows to the grid unpaid; building the business case on a headline export rate that later drops; tied tariffs that raise your import costs; and export rights that belong to a landlord, funder or PPA provider rather than the site occupier.

• Unpaid export. On commercial G99 connections, the export MPAN isn't always created at commissioning. Until it is, surplus power goes to the grid for free. Check it exists before you compare tariffs.

• Headline rates that don't last. SEG rates are set by the market and change. A business case that only works at today's best rate is fragile.

• Tied tariffs. A generous export rate isn't good value if it comes with a more expensive import tariff on a much larger volume of electricity.

• Battery rules. Grid-charged electricity generally doesn't qualify for SEG, so solar export and battery export need to be metered and agreed carefully.

• Who owns the export. Leases, finance agreements and PPAs can assign export revenue or environmental attributes to another party. Tenants in particular should check before assuming the income is theirs.

• Export limits. A DNO export cap can reduce how much you're able to export in the first place, which matters most for export-heavy business cases. This is notoriously difficult to model and forecast. Check the assumptions that are being used to understand your risk.

How can a business get more value from its solar surplus?

Use more of it on site, store what you can't use, and sell the rest at the right time. Sizing the system to your daytime demand, adding battery storage where the numbers work, shifting flexible loads into solar hours and reviewing your export tariff regularly all increase what each unit of solar is worth.

• Size to your half-hourly demand. Annual totals hide when surpluses occur. Forecast half-hourly generation and demand before choosing system size.

• Consider storage. A battery shifts midday surplus into the evening, when grid power costs more. On some time-of-use export products, evening-peak export has priced above 25p/kWh in 2026, but battery export rules are strict, so model it carefully.

• Move flexible loads. EV fleet charging, pre-cooling, water heating and compressed air can often be scheduled into solar hours.

• Review your export tariff. Set a reminder before any fixed term ends. Export markets move, and switching SEG providers is usually simple.

Frequently asked questions

Is there net metering in the UK?

No. UK export schemes pay for each unit you export at an agreed export rate. They don't credit exported units against imported ones.

Can a business get the Smart Export Guarantee?

Yes. Companies, charities, public bodies, farms and landlords can all be SEG generators, provided the installation is in Great Britain, is 5MW or smaller, and meets the certification and metering requirements.

Do I have to use my electricity supplier for export?

No. You can choose any SEG licensee, whoever supplies your import. Compare rates and check the terms for business meters at your export capacity.

Do I need MCS certification for commercial solar export?

For solar PV up to 50kW, SEG normally requires MCS or equivalent certification. Above 50kW, MCS isn't strictly required, but most suppliers expect equivalent evidence of quality.

Is it better to export solar or use it on site?

Using it on site is almost always worth more, because it avoids buying grid power at your full import rate. Export surplus you can't use or economically store.

What happens to my export income if I have a solar PPA?

Under a PPA, the system owner usually keeps any export income, and you pay for the solar power you use. Often, you can use the export income to limit your risk for under consuming against your PPA minimum consumption threshold, meaning you only pay for the delta between the agreed PPA rate, and the income received by any export tariff in place.

What is the point?

Export is a necessary consideration on the majority of projects, where a sites generation is increased to cover more of the seasonal demand, you will almost always increase the surplus energy produced for export. Understanding what, if any value has been attached to that, who it benefits, and how it has been modelled, is the only way for you to stress test your financial feasibility. A competent solar developer will be able to give you answers to all these assumptions and how they were reached.