Why your export rate matters less than your self-consumption

People spend a great deal of energy hunting for the best export rate and almost none on the thing that is worth several times more: how much of their own generation they actually use.

The arithmetic is not subtle, and the current rates make it concrete. A unit you consume yourself saves you your import rate, which is 26.11p per kilowatt hour on the current cap. A unit you export earns your export rate, and one of the better ones, Octopus Outgoing, pays 12p. The same kilowatt hour is worth more than twice as much used as sold, and on the open SEG rates of a few pence the ratio stretches to five or six times. It is not close.

Why the ratio is what it is

Your import rate covers wholesale energy, network charges, policy costs, supplier margin and VAT. Your export rate covers roughly the wholesale value of the energy, and not much else.

You are not being cheated. You are simply seeing that most of what you pay for electricity is the cost of delivering it to you, and when you generate on your own roof, you avoid all of that. Selling it back avoids none of it.

That structural gap is stable. Export rates have improved over the years and import rates have moved with wholesale prices, but the layers of delivery cost inside the import rate are not going anywhere, so the ordering, use beats sell, is not a temporary market condition that will close.

What this means in practice

Chasing an export rate improvement is worth a fraction of what raising self consumption is worth, per unit affected. So the order of operations should be:

1. Shift consumption into daylight. Free. Dishwasher, washing machine and tumble dryer on daytime timers. Every unit moved from evening to generating hours is worth the full gap between your rates, about 14p at the cited figures, and it costs nothing.
2. Divert surplus to hot water. A solar diverter sends surplus generation to an immersion heater instead of exporting it. One sum first: a diverted unit is worth the water heating it displaces minus the export you gave up. If your water is otherwise heated by electricity, that is the full import-export gap; if by gas, which is cheaper per unit of heat, the margin is much thinner and the diverter has to be cheap to justify itself.
3. Charge an electric car during the day where your pattern allows it, or use a charger that follows the solar surplus.
4. Add storage if the gap between your rates is wide and your daytime occupancy is low. The most expensive option, and the one that works when the others cannot: price it per cycled unit before assuming it earns.
5. Then optimise the export rate for whatever surplus genuinely remains.

Most advice reverses this list, because the export rate involves a switch someone can sell you, and the first item involves a dishwasher timer.

The number nobody states

Self consumption rate is the share of your generation you use rather than export. It is the single most influential figure in any solar projection, and it is routinely absent from quotes: the payback sensitivity is measured in years when it moves.

Two identical systems on two identical roofs will return very different amounts because the households behave differently. That difference is entirely captured in this one number, which is why leaving it unstated is so convenient for whoever produced the savings figure.

Ask what was assumed. Then check whether it describes you. In our own model it is derived from your occupancy answer and stated, which is the treatment to demand from anyone else’s projection too.

Measuring your own

If you already have solar and a smart meter, you can measure it rather than estimate it:

1. Take your generation over a period, from your inverter monitoring.
2. Take your exported units over the same period, from your smart meter data.
3. Self consumption rate is generation minus export, divided by generation.

Do it for a summer month and a winter month separately: the rate is usually far higher in winter, when generation is small enough for the house to absorb nearly all of it, and the annual blend can hide that.

If you do not yet have solar, approximate it from your half hourly consumption during generating hours against an estimated generation profile. Cruder, but it tells you whether you are in the high or low band, which is what matters.

Where the export rate does still matter

None of this means export payments are irrelevant. They matter most when:

• You have a large array relative to your consumption, so surplus is unavoidable.
• Your household is genuinely empty during the day and storage is not planned.
• You are on a tracking rate with a battery that can hold export back for the evening peak.

In those cases the export rate is doing real work, and comparing the offers properly is worth the hour it takes. It is just not the first lever.

The practical test

Before switching suppliers for a better export rate, work out what the improvement is worth: the rate difference multiplied by your annual exported units. A 2p improvement on 2,000 exported kilowatt hours is £40 a year.

Then work out what a modest increase in self consumption would be worth: the gap between import and export rates, multiplied by the units you would move. Moving just 500 kilowatt hours a year from export to self use, a dishwasher, a washing machine and some car charging shifted into daylight, is worth about £70 at the cited rates, without changing supplier at all.

Compare your own two figures the same way. For most households the second is larger, it compounds with everything else, and nobody had to sell you anything.