Smart Export Guarantee (SEG) Explained

Got solar panels or a wind turbine? If you generate more energy from them than you use, you could get paid for exporting it to the National Grid under the Smart Export Guarantee. Find out how the scheme works and how much you could get.

Got solar panels or a wind turbine? If you generate more energy from them than you use, you could get paid for exporting it to the National Grid under the Smart Export Guarantee. Find out how the scheme works and how much you could get.

Sofia Hutson
From the Energy team
4
minute read
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Posted 5 JULY 2021

What is SEG, or the Smart Export Guarantee? 

If your home or business generates renewable energy that you don’t use, you can earn money by signing up to the Smart Export Guarantee (SEG). 

Part of the Government’s aim to become a net-zero emissions economy, the scheme was introduced on 1 January 2020. It replaces the Feed-in Tariff (FiT) and like the FiT, it offers payments to people generating energy from renewables. But it works slightly differently.

Who is the SEG for? 

You could benefit from the SEG if you generate excess electricity from: 

  • Solar PV panels: These use energy from the sun to heat water or convert into electricity. (PV stands for photovoltaics, which convert the sun’s light into useable energy.) 
  • Wind turbines: These feature blades that rotate with the wind to generate energy. 
  • Hydro electric systems: These use power from rivers and streams. 
  • Micro-combined heat and power (Micro-CHP): Micro CHP boilers generate heat and electricity at the same time.
  • Anaerobic digestion (AD): AD breaks down organic matter, like food waste, to produce biogas. 

To be eligible for the SEG, all energy installations should have an entire installed capacity of not greater than five megawatts (MW), or not greater than 50 kilowatts (KW) for Micro-CHP.

Types of Smart Export Guarantee 

To get paid, you need to sign up to a SEG tariff with a participating energy supplier. There are two types of SEG tariffs: fixed and variable. 

  • Fixed rate SEGs pay a set amount per kilowatt hour of electricity exported into the grid, regardless of when it’s exported. Most SEG tariffs are fixed rate.

  • Variable rate SEGs pay different amounts for exported electricity depending on how valuable the electricity is to the system at the time. Some companies may also offer multi-rate SEGs for electricity exported at different times. For example, whether it’s night or day, or the weekend or a weekday.

What's the difference between Smart Export Guarantee and Feed-In Tariffs? 

Under the FiT scheme, which was introduced in 2010, owners of renewable energy installations are paid for each unit of electricity they generate.

Customers also earn money for any extra units they don’t use by selling them to their energy supplier. (But please note that the FiT scheme is closed to new applicants.)

The Smart Export Guarantee scheme is a little different in that it rewards customers only for the energy they generate and do not use themselves.

Another difference is that, under FiT, the price for exporting energy (the ‘generation tariff’) was fixed by the Government. Under the SEG, energy suppliers set the price.

How much can I earn with solar panels? 

There’s no set amount, as Smart Export Guarantee rates and contract lengths depend on the ‘licensee’ – energy supplier – you apply to.

But while wholesale electricity prices can sometimes fall below zero, SEG suppliers must always offer tariffs above zero. You’re also entitled to receive payments based on actual meter readings. 

The amount of money you earn will depend on: 

  • How much electricity you export into the grid
  • Your SEG tariff rates
  • The time of export if your SEG has a time-variable rate
  • The amount you pay for electricity
  • How much of the electricity you use yourself (SEG is the amount you get paid for export)

Did you know…? 

Solar power Because of the success of solar power, the cost of installing solar panels has come down. It’s more than 50% cheaper, compared with 2011.

Which energy companies have SEG tariffs? 

All licensed energy suppliers with more than 150,000 customers are now obliged to offer a SEG tariff. This translates to more than 90% of the retail market and includes major energy suppliers like Octopus, Bulb and E.ON.

Can I get a Smart Export Guarantee Tariff? 

If you have an eligible energy installation, you’ll need to apply to a SEG licensee to be paid for the electricity you export to the National Grid.

The SEG Licensee doesn’t have to be the same company as your energy supplier.

Your renewable technology also has to be certified under the Microgeneration Certification Scheme (MCS) or an equivalent.

You also need to have a smart meter.

What should I do if I already have a Feed-in tariff? 

You don’t have to do anything. If you’re signed up to receive FiT payments, your contract will stay in place for as long as it’s set to run.

It’s unlikely you’ll earn as much by switching to an SEG tariff. Unlike the FiT scheme, SEG tariffs only pay for any excess renewable energy that’s generated and exported, so any energy you use won’t be paid for.

If you do decide you want to switch to the Smart Export Guarantee, you’ll have to opt out of the FiT – you can’t get both FiT and SEG payments.

Read our guide to switching energy suppliers to find out more.

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