Smart Export Guarantee explained

The Smart Export Guarantee (SEG) is a government-backed initiative in Great Britain designed to pay homeowners for surplus renewable electricity they export to the National Grid. This scheme encourages more homes to generate and use clean energy by turning self-generated power into a financial advantage. Launched in January 2020, the SEG replaced the Feed-in Tariff (FiT) scheme for new installations, requiring licensed electricity suppliers to offer tariffs and pay for this exported electricity.

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What is the Smart Export Guarantee (SEG)?

When your solar panels generate more electricity than your home consumes, the excess is automatically sent back to the grid. The SEG scheme allows you to get paid for every unit of this exported electricity. Your chosen SEG licensee (energy supplier) will measure how much electricity you export using a smart meter and then pay you based on their specific SEG tariff rate. This means you can earn money from the clean energy you produce but do not use yourself.

How SEG works for homeowners

The process involves your low-carbon electricity generation system, such as solar photovoltaic (PV) panels, producing electricity. Any power not used in your home is exported to the grid. A smart meter records these half-hourly export readings, and your SEG supplier then calculates your payment based on their agreed tariff.

SEG vs Feed-in Tariff (FiT)

The SEG scheme took over from the Feed-in Tariff (FiT) scheme, which closed to new applicants in March 2019. While both schemes aim to support renewable energy generation, they operate differently. The FiT scheme paid for both the electricity generated and an estimated amount of exported electricity. In contrast, the SEG only pays for the actual electricity you export, as measured by your meter.

If you are an existing FiT participant, your generation payments will continue. However, you can opt out of your FiT export payments and switch to an SEG tariff for your exported electricity, potentially earning more as SEG rates can be higher than older FiT export rates.

Who is eligible for SEG?

To participate in the SEG scheme, your renewable energy system and metering setup must meet specific criteria.

System requirements (MCS certification)

Your low-carbon generation system must be located in Great Britain and have a total installed capacity of no more than 5 megawatts (MW), or up to 50 kilowatts (kW) for micro-combined heat and power (micro-CHP) systems. Eligible technologies include solar PV, wind, hydro, micro-CHP, and anaerobic digestion.

Crucially, your installation and installer must be certified through the Microgeneration Certification Scheme (MCS) or an equivalent accredited scheme like Flexi-Orb. MCS certification is the UK's quality standard for renewable energy products and installations, ensuring high standards of safety, performance, and efficiency. Without this certification, you will not be eligible for SEG payments.

Metering requirements (smart meters)

A smart meter is generally required to accurately measure the electricity you export. This meter must be capable of providing half-hourly export readings. If you do not already have one, your energy supplier can usually install a second-generation (SMETS2) smart meter free of charge.

You cannot receive SEG payments if you are already receiving export payments under the FiT scheme. You also cannot receive SEG payments from another licensee for the same installation.

Comparing Smart Export Guarantee tariffs

The SEG scheme does not set a fixed price for exported electricity; instead, energy suppliers determine their own rates. This means there is a wide range of tariffs available, and shopping around is essential to maximise your earnings.

Factors influencing SEG rates

SEG tariff rates can vary significantly between suppliers, often ranging from a few pence to over 30p per kilowatt-hour (kWh) for some variable tariffs. Several factors can influence the rate you receive:

• Supplier's offering: Each supplier sets its own rates, which can be fixed or variable.
• Import electricity supplier: Some of the highest rates are offered if you also purchase your import electricity from the same supplier.
• Battery storage: Tariffs that integrate with battery storage or offer time-of-use rates can pay more, especially during peak demand periods.

To find the best SEG tariff, it is crucial to compare options. You can apply for an SEG tariff with any SEG licensee; it does not have to be the same company that supplies your import electricity or gas. Export rates typically range from 3-16p per kWh on widely available flat tariffs. Always check the latest offers directly with suppliers, as rates change often.

Understanding payment terms

Payments are typically made per kilowatt-hour (kWh) of exported electricity. While the minimum SEG rate a supplier must offer is 0p/kWh, most offer more competitive rates. Payments are often made quarterly, though this can vary by supplier. You will receive payments based on actual meter readings, not estimated amounts.

How to apply for the SEG scheme

Applying for the SEG involves a few key steps to ensure you meet all requirements and can start earning from your exported electricity.

Step-by-step application process

1. Ensure MCS certification: Verify that your renewable generation system is MCS certified. This is a fundamental eligibility requirement.
2. Install a smart meter: Make sure you have a smart meter capable of recording half-hourly export readings. If not, contact your current energy supplier to arrange an installation.
3. Compare SEG tariffs: Research and compare the SEG tariffs offered by different licensed suppliers. Look beyond just the headline rate and consider any conditions, such as requiring you to be an import customer.
4. Apply to your chosen SEG licensee: Once you have selected a supplier, apply directly to them. This can usually be done through their website.
5. Provide necessary documentation: You will typically need to submit your MCS certificate, proof of identification, proof of address, and details of your smart meter. Your energy supplier will then work with your Distribution Network Operator (DNO) to create an export MPAN (Meter Point Administration Number) for your property.
6. Start exporting and receiving payments: Once your application is approved and your export MPAN is set up, you can begin exporting electricity and receiving payments.

Required documentation

When applying, you will generally need:

• Your MCS certificate.
• Proof of grid connection (e.g., G98/G99 approval from your DNO) if available.
• Details of your smart meter, including export readings.
• Proof of identification and address.

Maximising your export earnings

While the SEG offers a clear path to earning from your solar panels, strategic choices can help you get the most out of the scheme.

Strategies for optimising self-consumption

The most effective way to maximise the financial benefit from your solar panels is often to use the electricity you generate yourself, rather than exporting it. This is because the cost of buying electricity from the grid is typically higher than the SEG tariff rates you receive for exporting.

Consider shifting your electricity consumption to times when your panels are generating the most power. For example, running washing machines, dishwashers, or charging electric vehicles during daylight hours can reduce the amount of electricity you need to import from the grid.

Integrating battery storage with SEG

Integrating battery storage with your solar panels can significantly boost your returns. A battery allows you to store excess electricity generated during the day instead of exporting it immediately. You can then use this stored energy later, such as in the evenings when grid electricity prices are higher, further reducing your import needs.

Some SEG tariffs are specifically designed to work with battery storage, offering higher variable rates that reward you for exporting electricity during periods of high demand on the grid. This approach gives you more control over your energy usage and export, turning your surplus generation into a more substantial financial reward.

Making the most of your solar energy means understanding your usage and export. Fuse Energy's digital platform provides a clear overview of your energy usage, helping you make informed decisions. Our 24/7 human customer support is also available to assist homeowners with their energy needs, ensuring a smooth and confident experience.