Solar self-consumption: what it is and how to implement it

Solar self-consumption is becoming an increasingly attractive option for UK homeowners and businesses aiming to cut energy bills, gain independence from suppliers, and embrace a more sustainable future. With rising electricity prices and improved access to solar technology, there’s never been a better time to consider producing your own energy. In this article, we’ll explain what solar self-consumption involves, how it works, and how to implement it effectively.

What is solar self-consumption?

This term refers to using electricity generated by solar panels installed on your home or commercial building to directly power your needs. Rather than relying solely on the national grid, you use the energy generated on-site, reducing your dependence on suppliers and lowering your bills.

Unlike systems focused purely on exporting to the grid, this model prioritises using your own energy as efficiently as possible.

How does a self-consumption system work?

A typical solar self-consumption setup includes:

• Solar PV panels to absorb sunlight.

• Inverters to convert DC into AC power.

• Smart meters to measure energy production and usage.

• Optional batteries to store excess energy for later.

During daylight, your property consumes the electricity produced. Any unused energy can be stored or exported to the grid depending on your arrangement with the supplier and your chosen tariff.

Financial benefits

A major advantage of solar self-consumption is the potential for substantial energy savings. Depending on usage patterns and system size, energy bills can be reduced by up to 70%.

The UK government offers incentives like the Smart Export Guarantee (SEG), which pays you for surplus electricity exported to the grid. Combined with reduced grid reliance, this can lead to a payback period of 5 to 8 years.

Over time, solar installations also add value to properties and offer protection against future tariff increases.

Environmental impact

Implementing solar self-consumption significantly cuts greenhouse gas emissions by reducing reliance on fossil-fuel-generated electricity. For businesses, it supports ESG commitments; for households, it means a cleaner, greener lifestyle.

By producing and using your own clean energy, you contribute to the UK’s net zero targets and help decentralise energy production.

Types of solar systems in the UK

There are several variations of solar self-consumption depending on the setup:

Standalone self-consumption

Energy generated is used directly without exporting excess to the grid. Batteries may be used to store surplus for night-time use.

Self-consumption with export

Excess energy is sent to the grid under SEG, and you receive payments from your energy provider for what you export.

Collective self-consumption

Still in early stages in the UK, this involves shared solar systems among multiple homes or flats, common in housing associations or cooperatives.

What do you need to install a system?

To get started with solar self-consumption, you’ll need:

• A roof or ground area with good sun exposure.

• A certified solar installer.

• Planning permission (rarely needed for domestic systems under 50 kWp).

• Approval for SEG if you want export payments.

Many installers offer turnkey packages including site surveys, installation, legal paperwork, and connection to the grid.

Regulatory framework and incentives

In the UK, solar self-consumption is supported by the SEG, which replaced the Feed-in Tariff (FiT) scheme. You must register with an SEG licensee and install an MCS-certified system to receive export payments.

Although upfront grants are limited, solar panels benefit from 0% VAT (until 2027 for residential installations), making them more affordable.

Real-life examples in the UK

From homes in Cornwall to small businesses in Yorkshire, solar self-consumption is helping users save hundreds of pounds annually.

A bakery in Brighton, for example, installed a 12 kW system with battery storage and managed to reduce its energy bills by 60% in the first year, with a projected return on investment in under 6 years.

Is it worth it?

Absolutely. Between lower energy costs, increased property value, and environmental benefits, solar self-consumption is a smart long-term decision. With the SEG and reduced VAT, the barriers to entry are lower than ever.

How to choose the right installer

Choosing an accredited installer is essential. Look for companies certified under the Microgeneration Certification Scheme (MCS) and check they offer strong warranties and post-installation support.

Ask for quotes from at least three providers and compare system design, estimated savings, and payback period.

Frequently Asked Questions (FAQ)

How much does a solar self-consumption system cost in the UK?
Typical residential systems range from £5,000 to £7,000 for a 3–4 kW array without batteries. If you add battery storage, costs can rise to £8,000–£12,000 depending on capacity. Businesses or larger homes requiring 6 kW or more may see upfront costs of £10,000–£15,000, but many installations qualify for 0 % VAT (until 2027), reducing the net expense.

Do I get paid for exporting energy?
Yes, under the Smart Export Guarantee (SEG), approved suppliers pay for every kilowatt-hour you send to the grid. Rates vary by provider—typically between 3p and 7p per kWh—so shopping around can maximise returns. You must install an MCS-certified inverter and register with an SEG licensee to receive payments.

Is planning permission needed?
In most cases, domestic solar PV installations do not require planning permission if the panels are below 50 kWp, flush-mounted on the roof, and not in a conservation area or on a listed building. For commercial projects above 50 kWp or sites with special heritage status, you should check with your local planning authority. Always confirm before installation to avoid potential enforcement issues.

Are batteries necessary?
Batteries are not mandatory but can significantly boost self-consumption—storing daytime surplus for evening or cloudy periods. Without a battery, unused energy is exported under SEG, which pays less per kWh than retail rates. Adding storage typically increases payback periods by 2–3 years but can deliver greater independence and resilience during power cuts.