Solar and grid import explained: net vs gross, and what your bill shows

A UK home with solar PV sees electricity flow in two directions across the meter. The inverter prioritises self-consumption first, then optionally charges a battery, then exports any surplus to the grid. A SMETS2 smart meter records imports and exports on separate registers and reports them to the supplier every 30 minutes. The bill shows imported kWh charged at the household's import tariff and exported kWh credited at the Smart Export Guarantee rate. Net metering, where exports cancel imports kWh for kWh on the same meter, does not exist in the UK.

The SEG is a gross export scheme: every exported kWh is paid separately at the export rate, regardless of how many kWh were imported.

Most confusion around solar and grid import comes from two misunderstandings. Net metering is widely discussed online because it is the US and parts of Europe norm; it has never existed in Great Britain. Smart meters are widely assumed to be capable of "running backward"; they cannot, and they were never designed to.

How the inverter sets the order of operations

A modern domestic solar inverter, whether string, hybrid or microinverter-based, follows a fixed priority order on the AC side of the system:

1. Self-consumption. Available solar generation goes to whatever the house is using in real time. The inverter modulates output to match instantaneous demand from kettles, fridges, EV chargers and so on.
2. Battery charging (if fitted). Any surplus after self-consumption flows to the battery until the battery reaches its configured maximum state of charge. Most hybrid inverters allow this priority to be reordered (battery-first or grid-charging) but self-consume-first is the default and the most economic configuration.
3. Export to grid. Any remaining surplus flows out through the meter to the distribution network. The inverter does not "decide" to export; export is the default destination for any current the household and battery cannot absorb.

The reverse direction is simpler. When the house needs more than solar plus battery can supply, the inverter pulls the shortfall from the grid through the meter. This is the import flow. Imports and exports do not happen simultaneously; the meter records whichever is net at each settlement period.

What a SMETS2 smart meter actually records

Smart Metering Equipment Technical Specifications version 2 (SMETS2) is the standard for new smart meters installed in Great Britain since 2018 under the BEIS (now DESNZ) Smart Metering Implementation Programme. A SMETS2 electricity meter has four registers of interest for a solar household:

• Import active energy. Cumulative kWh imported from the grid.
• Export active energy. Cumulative kWh exported to the grid.
• Half-hourly import profile. Granular import in 30-minute settlement periods.
• Half-hourly export profile. Granular export in 30-minute settlement periods.

The half-hourly profiles are what enables time-of-use import tariffs (Octopus Agile, Cosy Octopus) and high-rate SEG tariffs like Octopus Outgoing Fixed. Without SMETS2 half-hourly data the supplier has no granular record of when the household imported or exported and cannot bill on a time-of-use basis.

The Data Communications Company (DCC), regulated by Ofgem, is the licensed entity that collects half-hourly data from SMETS2 meters and routes it to the customer's electricity supplier. Ofgem's smart metering policy framework, updated in March 2025, requires suppliers to offer at least one SEG tariff to a household with an export-capable smart meter and a qualifying generation system.

Why the UK does not have net metering

Net metering is the regime where a single bidirectional meter records net flow only. If a household imports 100 kWh and exports 80 kWh in a billing period, the meter shows 20 kWh net imported, and the bill is calculated on 20 kWh at the import tariff. Exports effectively offset imports kWh for kWh at the import tariff value.

The UK does not use this model. There are two reasons. First, the import tariff includes per-kWh distribution charges, transmission charges, balancing charges, environmental and social levies, and supplier margin. The energy commodity element is only a fraction (roughly 35 to 45%) of the all-in unit rate. Allowing exports to offset the full import rate would effectively oblige the network to absorb the full delivery cost of energy the household is sending the other way, which the GB regulatory framework does not support.

Second, the FIT-to-SEG transition in 2019 was an explicit policy choice to move from a subsidised generation-plus-deemed-export model to a market-based gross export model. DESNZ (then BEIS) published the SEG impact assessment in 2019 confirming the design intent: suppliers compete on the export tariff, exports are paid separately at the supplier's published rate, and the consumer keeps the full saving on whatever is self-consumed.

Here is where it breaks for households expecting net metering. A household generating 4,000 kWh per year, self-consuming 1,200 kWh (30%) and exporting 2,800 kWh, looks at the bill and sees imports billed at the cap rate of around 26p per kWh while exports are credited at 4 to 8p per kWh on most SEG tariffs. The gap feels unfair if the mental model is net metering. Under the gross export model that gap is structural: self-consumption is where the value sits.

What the bill actually looks like

A typical post-installation bill from an Octopus, EDF, OVO or British Gas customer with solar PV and a SMETS2 meter shows:

Important detail. Most suppliers do not net the SEG credit against the import bill on every monthly statement. Octopus pays SEG credit monthly into the energy account, which then offsets the next direct debit. British Gas and EDF more often pay SEG quarterly. OVO has historically paid annually. Check the supplier's specific SEG terms.

The Ofgem cap regulates the import tariff for default customers but does not regulate the SEG export rate. The export rate is a market choice by each supplier. Ofgem's Q2 2026 cap decision, published 24 February 2026 with effect from 1 April 2026, set the typical dual-fuel direct-debit cap at the published level for that period; the SEG rates moved independently across suppliers in the same window.

The standing charge does not disappear

Solar PV reduces imported kWh; it does not reduce the standing charge. The standing charge is a fixed daily fee, capped by Ofgem, that covers network costs, metering, and supplier overheads. A typical electricity standing charge under the April 2026 cap is around 60 to 65p per day, with regional variation: the London region typically sits below average, the North Wales and Mersey region typically sits above. For a household generating most of their daytime demand from solar but still on-grid, the annual standing charge alone is £220 to £240 before any kWh of import is bought.

Ofgem consulted in 2024 on a "zero standing charge" optional tariff requirement, with new rules effective from April 2026 allowing customers to choose a no-standing-charge tariff with a higher unit rate. For a solar household with low net imports, the zero-standing-charge option can sometimes save money. The calculation depends on whether the higher unit rate on the small remaining import volume exceeds the standing charge saved.

Generation meters and the legacy FIT regime

Households on the legacy Feed-in Tariff, registered before 1 April 2019, have a different setup. The FIT pays per kWh generated, regardless of whether the kWh was self-consumed or exported. That requires a separate generation meter installed alongside the PV inverter. The FIT scheme also includes a deemed export rate of 50% of generation, which is paid at the export tariff regardless of actual export.

SEG is fundamentally different. There is no generation meter under SEG; there is only the export register on the SMETS2 smart meter. SEG pays only on actual exported kWh, measured at the meter. A FIT household adding a battery saw their FIT payments unaffected because FIT pays on generation. A SEG household adding a battery sees export drop because the battery absorbs surplus that would otherwise have exported, which trades export income for higher-value self-consumption.

What the inverter display shows versus what the bill shows

Most inverter apps (SolarEdge, Solis, GivEnergy, Fox ESS, Enphase Enlighten) show generation, self-consumption, battery state of charge, and export. The numbers are derived from internal measurements on the inverter's DC and AC sides, plus any current transformer clamps fitted around the household consumer unit feed.

In practice, the inverter app and the SMETS2 meter often disagree by a small percentage. On the ground, expected gaps:

• Inverter export reading versus meter export reading: typically within 1 to 3%, with the meter authoritative for billing.
• Self-consumption reading: depends on where the current clamp is fitted. A clamp fitted on the meter tails rather than the consumer unit feed gives the most accurate figure.
• Battery throughput: shown by the inverter only, not by the meter.

Always use the meter's export register for SEG payment verification. The inverter app is for monitoring; the meter is for billing.

What happens on a cloudy winter morning

The flow reverses. A 4 kWp array on a December morning in Newcastle generates 200 W on average against a household load of 1.5 kW for breakfast cooking, lighting and heating circulation pumps. Self-consumption equals generation: 200 W. The inverter exports nothing. The grid supplies the remaining 1.3 kW. The meter's import register increments; the export register does not. The household pays the standard import rate on that 1.3 kW for as long as the deficit lasts.

Across a full UK winter day in late December, a typical 4 kWp system generates 2 to 5 kWh total, against household demand of 15 to 25 kWh in a gas-heated home or 40 to 70 kWh in a heat-pump home. Net winter import dominates the bill. Net summer export is what offsets it. The annual balance is the financial reality.

Scotland, Wales, Northern Ireland

Scotland and Wales operate on the same GB SEG framework as England. The Ofgem cap, the SMETS2 standard, and the SEG rules apply equally. Regional standing charges and unit rates vary because the cap is regional, with the South Scotland and North Scotland regions historically carrying higher standing charges than the South East of England.

Northern Ireland operates outside SEG. The Utility Regulator (UREGNI) administers a separate microgeneration regime, and NIE Networks operates a different smart-meter rollout under a different technical standard. A household in Belfast moving from oil heating to solar PV and a heat pump should expect the export side to look different and the metering hardware to differ from GB.

Frequently asked questions

Does the UK have net metering?

No. The UK uses a gross export model under the Smart Export Guarantee. Exports are paid separately at the SEG rate, not netted against imports at the import rate.

Why is the SEG export rate lower than the import rate?

The import rate includes network, balancing, environmental and policy charges plus supplier margin. The SEG rate pays only for the energy commodity element of the exported kWh.

Does a smart meter run backwards when solar is exporting?

No. SMETS2 meters have separate import and export registers. The export register increments on exports; the import register does not decrement.

When does the supplier pay the SEG credit?

Suppliers set their own payment frequency. Octopus pays monthly into the energy account; British Gas and EDF typically pay quarterly. OVO has historically paid annually. Check the SEG contract terms.

Can a household be on FIT and SEG at the same time?

No. The Feed-in Tariff closed to new entrants on 1 April 2019. Existing FIT customers stay on FIT and cannot switch to SEG. New installations after 1 April 2019 are SEG only.

Does a battery change the import or export numbers?

Yes. A battery typically lifts self-consumption from 25 to 35% up to 60 to 80%, which cuts imports and cuts exports proportionally. The trade is export income for higher-value avoided imports.

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