On-Site Solar and Scope 2 Reporting: How Self-Generated Power Counts
Updated 23 October 2026 · SEO Dons Editorial
Where does on-site solar sit among the scopes?
The GHG Protocol's Scope 2 Guidance "standardizes how corporations measure emissions from purchased or acquired electricity, steam, heat and cooling". The Department for Education's reporting guidance for academy trusts puts the same split in plain terms: Scope 1 covers "emissions from combustion in owned or controlled boilers, vehicles", and Scope 2 "includes emissions from own consumption of purchased electricity, heat, steam and cooling".
Solar panels burn nothing. The GHG Protocol's technical FAQ says renewable sources such as solar "have no direct emissions at the point of electricity generation, and therefore use an emission factor of zero in scope 2". So electricity a company generates and uses itself adds nothing to Scope 1 or Scope 2. The effect shows up through the units it no longer buys.
How does self-consumed solar change the location-based figure?
The location-based method values purchased electricity at a grid-average factor. The GHG Protocol describes it as designed "to show emissions from the production supporting the local consumption without reference to any contractual relationships". Each unit generated and used on site is one fewer unit bought, so the Scope 2 figure falls by that unit multiplied by the factor.
For 2026 the Department for Education's worked example applies 0.13096 kg CO2e per kWh, labelled "2026 UK electricity", to purchased electricity under Scope 2, using the Government's 2026 conversion factors. Those factors are published each year by the Department for Energy Security and Net Zero. The Energy Managers Association's summary of the department's note says a new methodology "uses more up-to-date electricity generation data, reducing the data lag from two years to one", giving a significantly lower factor than 2025.
That Scope 2 factor is generation-only. The GHG Protocol says Scope 2 methods use "generation-only emission factors, which do not include T&D losses or upstream lifecycle emissions", and that transmission and distribution losses are reported separately in Scope 3 category 3. The conversion factors carry a separate transmission and distribution tab for them. The carbon savings page gives tonnes by array size and region on this factor.
What happens to units exported to the grid?
Scope 2 is built from purchased electricity, so exported units are not subtracted from it: they were never bought. The GHG Protocol also separates two questions. In October 2025 it opened one consultation on updates to the Scope 2 Guidance, "which addresses inventory accounting", and another on "consequential accounting methods for estimating avoided emissions from electricity-sector actions". Any benefit from exported units belongs in the second category, not in the Scope 2 inventory.
What does the market-based method do, and where do REGOs come in?
A company operating where supplier-specific data is available "must report both location-based and market-based scope 2 emissions". In the market-based method a zero factor can be applied to electricity consumed, "whether it is purchased from the grid or uses on-site resources", only if the company retains and retires the energy attribute certificates, a category that includes REGOs. The GHG Protocol adds that a company which sells the certificates for its renewable output, even while keeping the physical electricity, gives up the zero-emission attribute: to keep it, it "must not sell the EAC to other consumers/utilities".
Ofgem explains the UK certificate, the REGO: "One REGO certificate is issued per megawatt hour (MWh) of eligible renewable output to generators of renewable electricity", and its primary use is Fuel Mix Disclosure by suppliers. The GHG Protocol also requires reporters to state that its eight Scope 2 Quality Criteria have been met for the instruments they use, so a REGO claim has to meet those criteria, not just exist.
| Item | Location-based | Market-based |
|---|---|---|
| Solar used on site | Fewer purchased units, valued at the grid-average factor | Fewer purchased units; the rest valued from the hierarchy of contractual instruments |
| Exported solar | No effect, because the units were never purchased | No effect on purchased units; the certificates can be sold or retained |
| Certificates for the solar output | Not used | Retained and retired to support a zero claim; selling them gives it up |
A worked example
Illustration only. A site uses 400,000 kWh a year. It fits a 100 kWp east-west flat-roof array in Birmingham, which PVGIS puts at about 80,000 kWh a year (800 kWh per kWp). Assume 75% is used on site and 25% exported.
| Item | Before solar | After solar |
|---|---|---|
| Electricity used on site (kWh) | 400,000 | 400,000 |
| Of which generated on site (kWh) | 0 | 60,000 |
| Purchased from the grid (kWh) | 400,000 | 340,000 |
| Exported (kWh), outside Scope 2 | 0 | 20,000 |
| Location-based Scope 2 at 0.13096 (tonnes CO2e) | 52.4 | 44.5 |
| Change | 7.9 tonnes lower (15%) |
The saving is 60,000 kWh multiplied by 0.13096, or about 7.9 tonnes. The 20,000 exported kWh change nothing. The market-based result depends on the supplier-specific factor and certificates: where purchased units are already matched to retired certificates at a zero factor, solar reduces the units that need matching, not the reported total.
What should a reporter check before publishing?
- Factor year. The Department for Education's example says trusts should use the 2026 conversion factors for 2025 to 2026 because they "cover the greatest proportion of the year". Match the factor to the reporting period.
- Meters. Purchased units come from the import meter. Generation and export meters give the split used above.
- Version of the method. The GHG Protocol held public consultations between 20 October 2025 and 31 January 2026 and says the feedback will inform revision of the Scope 2 Guidance (2015). Check which version your framework asks for.
- Statutory regimes. Streamlined Energy and Carbon Reporting and the Energy Savings Opportunity Scheme have their own rules, covered elsewhere. The government's environmental reporting guidelines are "designed to help companies and limited liability partnerships in complying with" SECR.
Whether the payback of a system justifies it is a separate question, taken up in the worth-it assessment. How the array, inverters and metering fit together is in the commercial PV systems guide, and you can send an enquiry through the site's form if you want a designer to model generation for a reporting year.
Sources
- Scope 2 Guidance and public consultations, GHG Protocol, Scope 2 Guidance and public consultations, checked 22 October 2026.
- Scope 2 FAQ articles (renewable emission factor, onsite generation, dual reporting, transmission and distribution losses, reporting), GHG Protocol technical assistance, onsite generation, renewable factor, dual reporting, T&D losses, reporting, checked 22 October 2026.
- Streamlined Energy and Carbon Reporting (SECR) for academy trusts, Department for Education, gov.uk guidance, updated 12 August 2026, checked 22 October 2026.
- Greenhouse gas reporting: conversion factors 2026, Department for Energy Security and Net Zero, gov.uk, published 11 June 2026, checked 22 October 2026; summary of the 2026 changes, Energy Managers Association, EMA, checked 22 October 2026.
- REGO scheme, Ofgem, Ofgem, checked 22 October 2026.
- Environmental reporting guidelines, Department for Energy Security and Net Zero, gov.uk, checked 22 October 2026.
- PVGIS 5.3 PVcalc, Birmingham, 1 kWp, 10 degrees, 14% losses, European Commission Joint Research Centre, checked 22 October 2026: east and west.
Common questions
Is on-site solar a Scope 1 emission?
No. The Department for Education describes Scope 1 as combustion in owned or controlled equipment such as boilers and vehicles. Solar has no direct emissions at the point of generation, so there is nothing to add to Scope 1.
Do I need REGOs to show a Scope 2 reduction?
Not for the location-based figure, which falls because fewer units are purchased. Certificates such as REGOs matter for market-based claims, where a zero factor needs the certificates retained and retired.
Which year of conversion factors applies?
The government publishes new factors every year, in June for 2026. The Department for Education's example for academy trusts uses the 2026 set for the 2025 to 2026 financial year. Check what your own reporting framework requires.
Will the GHG Protocol revision change this?
It may. The Scope 2 consultation closed on 31 January 2026 and the GHG Protocol says feedback will inform a review of the 2015 guidance. Until revised guidance is published, check which version your reporting framework asks for.