Smart Export Guarantee (SEG) Explained

Got solar panels or a wind turbine? If you generate more energy from them than you use, you could be 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.

Written by

Dan Tremain

Energy and business energy expert

Last Updated

1 FEBRUARY 2023

5 min read

What is the 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, 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 have blades that rotate with the wind to generate energy.
Hydro electric systems - these create electricity using 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, such as food waste, to produce biogas.

To be eligible for the SEG, all energy installations should have an entire installed capacity of less than five megawatts (MW), or less than 50 kilowatts (KW) for Micro CHP (anything you have at home should be well within these limits).

Types of Smart Export Guarantee

To get paid, you’ll need to sign up to an 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. Sometimes companies 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 the 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 note that the FiT scheme is closed to new applicants.)

The Smart Export Guarantee scheme is a little different in that it only rewards customers for energy they generate but don’t use themselves.

Another difference is that under FiT, the government sets the price for exporting energy (the ‘generation tariff’). Under the SEG, it’s the energy suppliers who decide the price.

There’s no set rate, and how much you receive will depend on which energy supplier you go with.

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

How much 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

The cost of installing solar panels has come right down. It’s more than 50% cheaper than in 2011.

Which energy companies have SEG tariffs?

All licensed energy suppliers with more than 150,000 customers are obliged to offer an SEG tariff. This includes all the major energy suppliers, such as Octopus, British Gas, Scottish Power, and E.ON.

Can I get a Smart Export Guarantee tariff?

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

Do I have to go with the same company that supplies my energy?

You don’t have to go with the same firm that supplies your energy -you’re free to go with whoever gives you the best rate. However, you may find your energy supplier gives you a better rate as an existing customer.

What else do I need to join the Smart Export Guarantee?

Your renewable technology must be certified under the Microgeneration Certification Scheme (MCS) or 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.

You’re unlikely to earn as much by switching to an SEG tariff. Unlike the FiT scheme, SEG tariffs only pay for excess renewable energy that’s generated and exported. They won’t pay out for energy you use.

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