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What is the Smart Export Guarantee (SEG)?

Introduced in 2019 by the Government, the Smart Export Guarantee aimed to incentivise homes and businesses to install solar panels and other renewable electricity generators which could in turn enable them to earn money through the scheme.

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How does the Smart Export Guarantee work?

The Smart Export Guarantee licensees, which you can find a list of further down in this guide, determine the rate, contract length and other terms which you as a business (an SEG generator) will receive.

What is the purpose of the smart export guarantee?

The purpose of the smart export guarantee is to increase the amount of renewable energy generated in the UK. By paying those who export small-scale amounts of energy, the SEG scheme made renewable energy more financially attractive to those who wanted to reduce their monthly energy spend. Offering cash to those who generated small amounts of energy in turn creates an uplift in renewable technologies being used.

Creating a more efficient energy system in the UK will help reduce the country’s reliance on the National Grid, which will reduce energy costs overall. To be eligible for the SEG you must have a small-scale energy generation system such as solar panels, wind turbines or a hydro-powered system. You must also export your electricity to the National Grid via a smart meter.

Who is the smart export guarantee for?

The smart export guarantee is for small businesses and households who are able to provide half-hourly meter readings. You can speak to your energy supplier about having a compatible smart meter installed.

Homeowners are the largest target of the SEG, as it encompasses anyone with a small-scale generation system installed in their home. Businesses with qualifying renewable energy installations that exceed 50kW for micro-CHP and up to 5 MW for other technologies can also benefit from the SEG.

To apply for an SEG tariff you must apply directly on the Ofgem website, where you’ll also find details of the suppliers offering applicable tariffs.

What are the different types of smart export guarantee tariffs?

There are two main types of smart export guarantee tariffs, which are the fixed rate SEG tariff and the variable rate SEG tariff. They both differ slightly:

The fixed-rate SEG tariff

With the fixed rate SEG tariff, you will pay a set amount of kWh of electricity exported to the grid regardless of when you export it. With earnings on the fixed rate tariff, your sum amount will never change, which makes budgeting much easier. Most of the SEG tariffs follow a similar pattern, although there are also variable rate tariffs which you can read about below.

The variable rate SEG tariff

The variable rate SEG tariff pays differing amounts for exported electricity depending on how valuable the electricity is to the system at the time. They offer the potential for the highest earnings out of the two tariffs, especially if you’re exporting during peak times. However, the reason the fixed rate tariff is more popular is because the variable tariff is much more complex to understand and budget for, as your earnings will always fluctuate. For a small business, lacking in time it’s no wonder the fixed rate is more popular. Some variable rates do offer a guaranteed minimum payment, so your earnings will never go below a certain threshold.

Export only tariffs

These tariffs only pay you for the electricity you export to the grid, and not just for the electricity you use yourself. This can be a good option if you have large solar panels and generate additional electricity.

Battery storage tariffs

Some SEG suppliers offer tariffs that give you bonus payments for exporting electricity from your battery storage system. This can be a good option if you have a battery storage system and want to maximise your earnings from SEG.

List of SEG licensees

Of the providers that are registered SEG licensees, there are two categories which providers can fall into. The first category is the Mandatory SEG licensees and secondly, there is the Voluntary SEG licensees. Below are all of the SEG licensees:

Mandatory SEG Licensees:

  • British Gas
  • E (Gas and Electricity)
  • E.On
  • EDF
  • Octopus Energy
  • OVO Energy
  • Scottish Power
  • Shell Energy
  • So Energy
  • The Utility Warehouse
  • Utilita

Voluntary SEG Licensees:

  • Pozitive Energy
  • Rebel Energy

Please note: This list is subject to change, the current list is on the Ofgem website.

Smart Export Guarantee vs. the Feed-in Tariff?

Smart Export Guarantee The Feed-in Tariff
Availability Open to all new applicants since 2020 Closed to new applicants in March 2019. Existing recipients can remain on their tariff
Payments Only pays for electricity exported to the grid. Rates are set individually by energy suppliers and can vary Paid regardless of whether you export the electricity or use it yourself. Payments were set by the government for a fixed term (20-25 years)
Benefits More transparent system as rates are publicly available and can be compared between suppliers. Potentially higher export rates than some older FiT tariffs Guaranteed income regardless of usage and often higher overall rates than most current SEG tariffs. Offers more stability and predictability

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