The cost of electricity
Surplus compensation: what you are really paid for the energy you export
You generate more than you use and the surplus goes to the grid. The question we get asked almost every week is the same: do they pay me for that? Yes, but with caveats worth knowing before you sign anything.
When your installation generates more than you are using at that moment, the surplus is exported to the grid. In return, your supplier takes money off your bill.
The price they pay you is not set by law: each company decides it. Today the market range runs from around €0.04/kWh on the weakest tariffs to close to €0.13/kWh on the best. More than three times the difference for exactly the same energy.
That is the first warning: the best installation in the world on the worst export tariff performs considerably worse than it should. The contract deserves as much attention as the panels.
The limit almost nobody tells you about
Royal Decree 244/2019 sets a rule worth being clear about: surplus compensation can only offset the energy charge on your bill. Not the power charge, not the taxes, not the meter rental.
In plain terms: your bill can fall a long way, but never to zero. And nobody is going to pay money into your account.
There is a second detail. Whatever you do not offset within the month is lost. It does not carry over to the next one. That is why an oversized installation meant for "selling to the grid" is rarely good business on a home: you pay for more panels to generate a surplus that evaporates every 30 days.
Compensation offsets energy, never power charges or taxes.
Virtual batteries: what they are and when they pay off
More and more suppliers offer a "virtual battery". It is not a battery: it is a credit system. Instead of taking euros off within the month, it builds up a credit you can spend later and, in some cases, even on another supply point of yours.
The practical difference is simple. Normal compensation gives you credit in euros and it expires every month. A virtual battery stores energy for you and usually lasts considerably longer.
When is it worth it? Above all if you generate a lot at midday and use energy in the morning and at night, which is the typical pattern of a house with nobody home during the day. If you also have a second property or business premises, that is where it pays off most.
And compared with a physical battery? They are different things and worth not confusing. A virtual one saves you money, but gives you no backup: if the power goes off, your home goes dark just like your neighbour's. A physical one costs more, but it is the only one that keeps the fridge running in a power cut.
What to check before you sign
Three things, in order of importance.
First, the export price in €/kWh, and whether it is fixed or index-linked. Second, whether there is a tie-in period or a penalty for switching supplier. And third, whether the rest of the tariff is competitive: being paid well for your surplus is not much use if you are charged a lot for the kWh you buy, which is normally a good deal more.
We look at this before sizing anything, because it changes the calculation. A house that exports a lot and is paid badly needs a different installation from one that uses almost everything it generates.
If you already have an installation running and do not know what you are being paid, send us a bill. It takes five minutes to see.
