Feed-in Tariff vs Smart Export Guarantee: What Changed & Why Solar Still Pays
The Feed-in Tariff closed in 2019 but solar panels are a better investment in 2026 than they were under FiT. We compare the two schemes with real numbers and explain why.
If you are researching solar panels in the UK, you will quickly encounter two terms: the Feed-in Tariff (FiT) and the Smart Export Guarantee (SEG). One is a historical scheme that made solar incredibly profitable. The other is what replaced it. Understanding the difference matters — especially if you are buying a property with existing panels or wondering whether solar is still worth it without the generous FiT payments.
What Was the Feed-in Tariff?
The Feed-in Tariff was a UK government scheme launched in April 2010 that paid homeowners for every kilowatt-hour of electricity their solar panels generated — regardless of whether they used it or exported it. It closed to new applicants on 31 March 2019.
How FiT worked
- Generation tariff: You were paid for every kWh your panels generated, even if you used it yourself. Initial rates were up to 43.3p/kWh in 2010, dropping to around 3.5p/kWh by the time it closed in 2019
- Export tariff: You received an additional payment for electricity exported to the grid, typically 3–5p/kWh
- Payments were index-linked: FiT rates increased with RPI inflation each year
- Duration: 20 years from installation date (25 years for the earliest adopters)
- Tax-free: FiT payments were completely tax-free for residential installations
Why it was so generous
The early FiT rates were deliberately high to incentivise adoption when solar panels were expensive. A 4kW system installed in 2010 cost £12,000–£16,000 but earned £600–£800/year in FiT payments alone, plus bill savings. Many early adopters saw payback periods of just 5–7 years — and then enjoyed 13–15 more years of pure profit.
The high cost of FiT was funded through a levy on all electricity bills. As solar uptake exceeded expectations and panel prices fell dramatically, the government progressively reduced the tariff rates before closing the scheme entirely.
What Is the Smart Export Guarantee?
The Smart Export Guarantee replaced the Feed-in Tariff on 1 January 2020. It is a fundamentally different scheme — simpler, less generous, but still valuable.
How the SEG works
- Export payments only: You are paid only for electricity you export to the grid — not for what you generate or use yourself
- Rates set by energy suppliers: Unlike FiT, the government does not set the rate. Each licensed energy supplier with 150,000+ customers must offer a SEG tariff, but the rate is their choice
- No generation payment: There is no payment for the electricity you generate and use in your home
- Smart meter required: You need a smart meter (or SMETS2 meter) to measure your exports
- MCS certification required: Your installation must be MCS-certified
FiT vs SEG: Side-by-Side Comparison
| Feature | Feed-in Tariff (FiT) | Smart Export Guarantee (SEG) |
|---|---|---|
| Status | Closed (March 2019) | Active (since Jan 2020) |
| Generation payment | Yes (3.5–43.3p/kWh) | No |
| Export payment | Yes (3–5p/kWh) | Yes (3–15p/kWh) |
| Who sets the rate | Government (Ofgem) | Energy suppliers (competitive) |
| Index-linked | Yes (RPI) | No (suppliers can change rates) |
| Duration | 20–25 years guaranteed | No guaranteed term |
| Smart meter needed | No (deemed export at 50%) | Yes |
| MCS required | Yes | Yes |
| Tax-free | Yes | Yes (under £1,000/yr) |
Current SEG Rates (2026)
SEG rates vary significantly between suppliers. The best rates are considerably higher than the worst:
| Supplier | Rate (p/kWh) | Type |
|---|---|---|
| Octopus Energy (Outgoing) | Up to 15p | Variable (time-of-export) |
| Octopus Energy (Fixed) | 15p | Fixed |
| E.ON Next | 4.1p | Fixed |
| EDF Energy | 4.1p | Fixed |
| Scottish Power | 3.5p | Fixed |
| OVO Energy | 4.0p | Fixed |
| British Gas | 3.2p | Fixed |
For a full comparison with tips on maximising your export income, see our SEG rates comparison guide.
Is Solar Still Worth It Without the Feed-in Tariff?
Absolutely yes. This is one of the biggest misconceptions about UK solar in 2026. Here is why solar is actually a better investment now than it was under the early FiT:
Panel costs have collapsed
A 4kW system cost £12,000–£16,000 in 2010. The same capacity now costs £6,000–£7,500 with 0% VAT. That is a 50–60% reduction in real terms.
Electricity prices are much higher
In 2010, residential electricity cost around 12p/kWh. In 2026, it is 24–30p/kWh. Every kWh you generate and use yourself saves you more than double what it did when FiT launched. Self-consumption — not export payments — is now where the real value lies.
The maths still works
| Metric | 2010 (with FiT) | 2026 (with SEG) |
|---|---|---|
| 4kW system cost | £14,000 | £6,500 |
| Annual FiT/SEG income | ~£700 (generation + export) | ~£255 (export only, Octopus) |
| Annual bill savings | ~£200 (12p/kWh) | ~£476 (28p/kWh) |
| Total annual benefit | ~£900 | ~£731 |
| Payback period | ~15.5 years | ~8.9 years |
| 25-year net profit | ~£8,500 | ~£11,775 |
Despite lower export payments, the combination of cheaper panels and higher electricity prices means solar panels installed in 2026 actually deliver a better return than early FiT installations. The payback is faster and the total profit over 25 years is higher.
What If You Buy a House with FiT Panels?
If you are buying a property that has solar panels installed under the Feed-in Tariff, you can inherit the FiT payments. Here is what to check:
- Ownership vs lease: Confirm the panels are owned by the homeowner, not leased. Leased panels are a complication — see our guide to free solar panel claims
- FiT transfer: The FiT registration can be transferred to the new owner. The seller's energy supplier handles this
- Remaining FiT term: FiT payments last 20 years from installation. Panels installed in 2015 have ~9 years of payments remaining
- Current FiT rate: Ask the seller for their FiT statement showing the current generation and export rates. Remember these are index-linked, so they increase each year
- Panel condition: Check the panels, inverter, and mounting. The inverter may need replacing (10–15 year lifespan). Factor this into your offer
- MCS certificate: Ensure the MCS certificate is available. Without it, the FiT cannot be transferred
A property with FiT panels is genuinely worth more — you get both the bill savings and the guaranteed inflation-linked payments for the remaining term.
Can I Still Apply for the Feed-in Tariff?
No. The Feed-in Tariff closed to new applications on 31 March 2019. There is no way to apply for FiT in 2026. The Smart Export Guarantee is the current scheme for new solar installations. For details on all available incentives, see our solar grants and incentives guide.
The Bottom Line
The Feed-in Tariff was a generous scheme that kickstarted the UK solar industry. The Smart Export Guarantee is more modest — but solar panels are so much cheaper now that the overall investment case is actually stronger. The shift from "get paid to generate" to "save money by self-consuming" means the focus should be on system sizing, self-consumption, and potentially adding a battery — not chasing export rates.
If you are considering solar in 2026, the FiT era is over — but the economics have never been better. See our full analysis of whether solar panels are worth it.
John Rooney is the founder of Solar Info and has been covering the UK solar energy market since 2023. He fact-checks all content against official MCS and Ofgem data and maintains relationships with MCS-certified installers across the UK.