How Much Money Would You Get Paid Per kWh for Feeding Extra Electricity into the Grid with a Home Solar System?

The amount of money you would receive per kilowatt-hour (kWh) for feeding excess electricity into the grid from a home solar system can vary significantly based on several factors. From location-specific policies to market dynamics, understanding these factors is crucial to maximizing your financial returns from your solar installation.

Factors Affecting Pay Rates

1. Location

The feed-in tariff (FIT) rates, which determine how much you get paid for generating and feeding electricity into the grid, can vary by country, state, or even utility company within a country. These rates are influenced by government policies, market conditions, and the evolution of renewable energy technologies. To find out the current FIT rates and eligibility criteria for your area, it is best to check with your local utility company or relevant government agencies.

2. Time of Generation

Some FIT schemes offer different rates depending on the time of generation. For instance, electricity generated during peak demand periods might receive a higher FIT rate. This is because utilities are looking to balance the grid during high-energy consumption times. This can offer additional revenue streams for solar system owners who can time their electricity generation strategically.

3. System Size

The size of your solar system can impact the FIT rates. Larger systems might be eligible for different rates compared to smaller systems. The economic viability of your system depends not only on the initial cost but also on the ongoing revenue from FIT payments.

4. Type of System

Some FIT schemes offer different rates for different types of renewable energy systems. For example, solar photovoltaic (PV), wind, and hydro systems might all have their own respective FIT rates. This different treatment reflects the varying costs and efficiencies of different renewable technologies.

5. Market Dynamics

Feed-in tariff rates can change over time based on market conditions, government policies, and the evolution of renewable energy technologies. As the demand for renewable energy grows, FIT rates might increase, providing a higher return on investment for solar system owners.

Country-Specific Examples

Example 1: United Kingdom

In the UK, if you were granted approval for an export tariff, you could sign up to something like Octopus Fixed Export, which pays a flat rate of 15p/kWh at the current time. However, it's important to note that your export is subject to limits set by your Distribution Network Operator (DNO). In some cases, these limits could be zero, meaning you wouldn't receive any payment. Additionally, you might not receive payment for your excess electricity if you haven't sought permission from your utility company.

Example 2: United States

In the US, the situation can be different. For instance, in some areas, utilities might only offer credits against your electricity bill rather than direct payments. Furthermore, they might impose connection fees, which you are required to pay regardless of how much power you bank. Some utility companies also set maximum sizes for residential solar installations and may charge overproduction fees if you generate more than a certain amount, such as 2.00 USD per kWh over 15 kW. The typical maximum for residential installations is often around 20 kW, installations beyond that are generally considered commercial power generation.

Cash Incentives for Off-Grid Systems

If you are operating an off-grid system, such as being 100% off the grid on a mountain or in the desert, you will have the flexibility to design your system according to your budget. However, you will not be permitted to connect to the power grid without adhering to their numerous rules and regulations. In some cases, you might still need to pay a minimum connection fee, even if you do not consume any grid electricity.