Energy Arbitrage Explained. How SigEnergy's "AI Mode" Automates the Process for UK Homeowners

What is a Energy Arbitrage?

In a sentence: Energy arbitrage is the practice of buying electricity when it is cheap and selling it back to the grid when prices are higher.

Still confused? Read on, this blog post provides me with the space to explain it in a little more detail.

First, you'll need to understand the fundamentals…

What is a fixed rate export tariff?

A fixed rate export tariff pays you the same amount for every kilowatt hour you export to the grid. Many homeowners with solar panels are on a Smart Export Guarantee tariff already, this is a fixed rate export tariff. If the rate is, for example, 15p/kWh, then you receive that same payment whether you export energy at 1 AM or 1 PM.

This predictability is exactly what makes arbitrage possible. When the price you sell for is fixed, the only variable left is what you pay to buy electricity in the first place.

What is a time-of-use tariff?

A time of use tariff offers cheaper electricity during specific off peak hours. Most UK tariffs provide a window in the early hours of the morning where prices drop significantly. At the time of writing, some offer electricity as low as 6.7p per kWh for five or six hours overnight.

If you once used Economy 7, think of this as the modern version with a far wider range of suppliers and much more attractive pricing.

These tariffs exist because the grid has more energy at night than it can comfortably handle. Suppliers lower prices to encourage people to shift usage, which helps balance the load and avoids grid fines. The result is a price gap that homeowners with batteries can benefit from.

Why do utility companies offer these, and will they be around forever?

No one knows for sure, well, not without a crystal ball. The modern TOU tariffs are reskinned economy 7 tariffs, designed for "EV drivers". TOU tariffs aren't new, in fact, they're a really sensible way for the grid to perform 'load balancing'.

The national grid faces a problem, whereby there's an abundance of energy in the anti-social hours, when the majority of the UK is asleep (and not using much power). Utility companies offer a financial incentive to draw power, when there's an abundance of it, to avoid paying fines. Low and behold, the UK population have altered the way they consume energy, where possible, to maximise savings. That carrot on the end of the stick was quite effective wasn't it?

So what exactly is 'Energy Arbitrage'?

Here is the simple version. Your battery charges during the cheap off peak window at, say, 7p/kWh. Most batteries fill in less than two hours, which leaves several hours of cheap energy still available. If your export tariff pays 15p/kWh, you can export that stored energy at a profit. This is energy arbitrage.

It is entirely legal under current UK rules, we're are simply using the pricing system as it is presented.

And yes, it really is possible to buy electricity for less than you sell it for.

Wait, so I can buy the energy for a lower price than I can sell it for?

Yes, exactly that.

How SigEnergy's "AI Mode" Automates the Entire Process

This is where the clever stuff begins. SigEnergy systems include an optional AI Mode designed to remove the complexity from arbitrage. Instead of creating fixed charge and discharge schedules, AI Mode looks at your tariff window, your expected energy use, your likely solar generation and your battery capacity. It then works out when to empty the battery, when to fill it and how to make the most profitable use of the price gaps.

In practice, this means the system will often preemptively discharge the battery before the cheap window starts so it can arrive at that window as empty as possible. Once the window opens, it fills the battery at the cheapest moment, then manages your charging and exporting automatically.

The Profit Max setting does exactly what the name suggests. You simply tell the app when your off peak window starts and ends, what your import price is and what export rate you receive. SigEnergy handles the rest with no ongoing input from you.

Creative Low Carbon configures this for our customers as part of installation, so you get the full benefit from day one.

Is Energy Arbitrage frowned upon?

Utility companies certainly do not like it when homeowners outsmart the system, and play them at their own game. Some companies like as Octopus Energy, refer to exported energy not generated from solar as "brown energy". Technically speaking they do reserve the right to withhold payments for exports not coming from renewable sources.

That said, no supplier currently has any technical method of identifying which units of electricity in your battery came from your panels, and which came from the grid. The rules allow them to create policies but enforcement is essentially theoretical.

The reality is simple. Thousands of homeowners use arbitrage daily and suppliers know it. Whether they ever clamp down is impossible to predict, but the opportunity exists today and customers are taking advantage of it while it lasts.

Will it wear down my battery quicker?

In short, yes. Every battery has a cycle life. SigEnergy guarantees that after 10,000 cycles, their battery will still hold 80% of its original capacity. Even if you complete two full cycles a day, you're still looking at around ~14 years before dropping to that 80% threshold.

Final thoughts

Energy arbitrage has become one of the most powerful ways for UK homeowners to cut electricity bills and get the maximum return from a solar and battery system. With SigEnergy AI Mode handling the entire process automatically, it turns your home into a smart energy asset that earns money while you sleep. This is the same technology early adopters are using right now to reduce their grid reliance, increase energy independence and make their solar investment work harder every single day.

If you want a system that is set up correctly from day one and optimised for long term savings, talk to Creative Low Carbon. We design and install solar and battery systems built specifically for automated arbitrage, and as certified SigEnergy installers we configure AI Mode to deliver the highest possible performance for your home. If you are searching for a way to lower your electricity bills, upgrade your existing solar setup or install a complete energy storage system, contact Creative Low Carbon today and get a personalised quote for a SigEnergy powered solution.