Should I Switch from a Deemed Export Tariff to an Actual Export Tariff, Especially with a Battery? Maximise Your Solar PV Earnings.

With the increasing adoption of solar photovoltaic (PV) systems in the UK, many homeowners are exploring ways to maximise the financial benefits of their investment. One key decision faced by those with solar PV systems is whether to stick with a deemed export tariff or switch to an actual export tariff. This decision can significantly impact the financial returns from their solar energy system. Here's a comprehensive look at the pros and cons of both options, and a special consideration if you're planning to install a battery storage system.

Understanding Deemed Export Tariffs

Deemed export tariffs were introduced under the Feed-in Tariff (FiT) scheme, which was designed to incentivise the adoption of renewable energy technologies. Under this scheme, homeowners with solar PV systems are paid a deemed export for 50% of the electricity their system generates, regardless of the actual amount exported to the grid. This estimation is based on the assumption that the other half is consumed on-site.

For many years, deemed export tariffs have been a straightforward and convenient option. They provide a guaranteed income without the need for an export meter. This simplicity has been appealing, especially for those who want to avoid the hassle of arranging and sometimes convincing their energy provider to install one or the cost of additional metering.

The Rise of Actual Export Tariffs

Actual export tariffs, introduced more recently, offer payment for the precise amount of electricity exported to the grid. To benefit from this, an export meter or a smart meter capable of measuring export is required. This method provides a more accurate reflection of the energy you contribute to the grid, potentially leading to higher payments (depending on the rate paid), especially for those who export a significant portion of their generated electricity.

Pros and Cons of Deemed Export Tariffs

Pros:

1. Simplicity: No need for additional meters or technology. Payments are automatic and hassle-free.

2. Predictable Income: Guaranteed payments for 50% of the generated electricity provide a reliable income stream.

3. Lower Initial Costs: No need to invest in an export meter, reducing upfront costs.

Cons:

1. Inaccuracy: If you export more than 50% of your generated electricity, you might be losing out on potential income.

2. Fixed Assumption: The 50% assumption does not account for seasonal variations or changes in your consumption patterns.

Pros and Cons of Actual Export Tariffs

Pros:

1. Accuracy: Payments are based on the actual amount of electricity exported, which can maximise your earnings. If you can secure a high export tariff rate, it may surpass the 50% deemed export you receive.

2. Flexibility: As export tariffs can fluctuate, you may benefit from higher rates when they increase.

3. Incentive to Export More: Encourages efficient use of energy and maximises returns on excess generation.
   

Cons:

1. Initial Costs: Requires an export meter or a compatible smart meter, which can involve additional costs and installation.

2. Complexity: Managing and monitoring export levels can be more complex and may require more attention.

3. Variable Income: Export rates can fluctuate, leading to less predictable income compared to the fixed deemed export payments.
   

Impact of Battery Storage on Export Tariffs

Installing a battery storage system can significantly alter your energy usage and export patterns. Here’s how it impacts your decision between deemed and actual export tariffs:

Battery Storage Considerations:

1. Maximised On-Site Consumption: Batteries allow you to store excess solar energy generated during the day for use during the evening or night. This can drastically reduce the amount of electricity exported to the grid, meaning you have been paid via the deemed export but then use that energy - you are effectively being paid to use the energy in your home, on top of the amount you have received for generating it.

2. Reduced Exports: With a battery, the actual amount of electricity you export is likely to be less than the 50% assumed by deemed export tariffs. This could make the deemed export tariff less financially advantageous.

3. Increased Self-Sufficiency: By using more of your own generated electricity, you reduce reliance on grid electricity, potentially lowering your energy bills.
   

Should You Switch to Actual Export Tariffs with a Battery?

Having a battery and an EV will reduce the amount that you export to the grid, potentially making an export tariff less attractive.

• Yes, if you export significantly more than 50%: If your battery system allows you to consume most of your generated electricity, staying on a deemed export tariff can be more beneficial since you get paid for 50% of the generated electricity (and then use it from your battery) regardless of actual exports. However, if you find that even with the battery, you export more than 50%, an actual export tariff can better reflect your contribution to the grid and increase your earnings.

• Monitor Export Levels: Before making the switch, monitor your export levels post-battery installation. If you find that your exports have reduced considerably because of the battery and you have an electric vehicle that you like to charge, actual export tariffs may not be that beneficial.

• Evaluate Cost vs. Benefit: Consider the cost of installing an export meter or upgrading to a smart meter capable of measuring exports against the potential increase in income from actual export tariffs.
  

Making the Decision

To determine whether switching from a deemed export tariff to an actual export tariff is the right move, consider the following factors:

Export Levels: Assess how much electricity you typically export. If you consistently export more than 50% of your generated electricity, an actual export tariff might be more beneficial. If you consume more than 50%, sticking with the deemed export tariff may be more advantageous.

Metering Costs: Evaluate the cost of installing an export meter or upgrading to a smart meter. Weigh this against the potential increase in income from an actual export tariff.

Tariff Rates: Compare the current rates of deemed export payments with the actual export tariffs available. Keep in mind that actual export rates can vary, so consider the long-term outlook.

Future Plans: Consider any changes in your energy usage patterns or future plans that might affect your export levels. For instance, if you plan to buy an electric vehicle or add a battery storage system, your export levels could change.

Conclusion

Deciding whether to stay on a deemed export tariff or switch to an actual export tariff depends on your specific circumstances and priorities. While deemed export tariffs offer simplicity and predictability, actual export tariffs provide accuracy and the potential for higher earnings. If you are installing a battery storage system, the reduced exports might make actual export tariffs less appealing. Carefully evaluating your export levels, metering costs, and tariff rates will help you make an informed decision that maximises the benefits of your solar PV system. As a general rule of thumb, at least when you first install a battery, we at Solar and Battery.com would recommend sticking with your deemed export tariff initially, and monitor what you export. A tactic some of our customers employ once they add a battery to their solar p.v. system and have monitored their export, is to use time shifting tariffs to their advantage. Thus, they charge their battery at night, at a lower rate, such as 9p and then export generated energy from their solar p.v. system at a higher export rate, such as 15p. Generally though, you will find that sticking with the deemed export, with a battery, is the easier and straightforward approach, that still gives great returns.