Everything you need to know about the Smart Export Guarantee (SEG)

If you generate your own renewable business electricity in England, Scotland, or Wales, the Smart Export Guarantee (SEG) could be a great way to earn some extra cash by exporting electricity back to the grid.  

If you're in Northern Ireland, the SEG isn’t available, but some energy suppliers offer their own export tariffs, so it’s worth checking with your provider. 

The SEG is a government scheme designed to ensure that households and businesses that generate renewable energy are paid for the electricity they export to the grid. But it’s not automatic – you need to sign up. Here’s all you need to know. 

Is the Smart Energy Guarantee the same as a Feed-In Tariff? 

No, the Smart Export Guarantee (SEG) is not the same as the Feed-in Tariff (FIT), though both are designed to pay you for generating renewable electricity. Here are the key differences: 

1. Introduction and Duration 

• The Feed-in Tariff (FIT) scheme was introduced in 2010 to incentivise the installation of renewable energy systems like solar panels, wind turbines, and micro-CHP. However, the FIT scheme closed to new applicants in March 2019. Those who signed up before the closure will continue to receive payments until their contract ends. 
• The Smart Export Guarantee (SEG) was introduced in January 2020 to replace the FIT scheme. It applies to new and existing renewable energy systems that generate electricity for export to the grid. 

1. Payment Structure: 

• FIT offered a fixed payment for both the electricity you generate and export to the grid, with long-term contracts (up to 20 years). 
• SEG focuses only on the electricity you export to the grid, not what you generate and consume on-site. It offers a variety of tariffs, which can be fixed or variable, and energy suppliers set their rates. The SEG guarantees that the payment will always be above zero. 

1. Eligibility: 

• FIT required eligible technologies to meet certain standards and capacities (such as solar PV systems up to 5MW). 
• SEG has similar technology requirements (solar, wind, hydro, and micro-CHP) but with the added requirement that you need a smart meter to measure the exported energy. 

1. Existing Contracts: 

• FIT is still applicable to those who were already enrolled before it closed, but new applicants cannot join. 
• SEG is open to new installations and offers greater flexibility in the tariffs chosen by suppliers. 

In summary, while both schemes incentivize the use of renewable energy, the FIT focuses on generation and export with guaranteed payments, whereas the SEG only covers export and has more flexible, supplier-determined rates. 

Who can get a Smart Export Guarantee tariff? 

To qualify for the SEG, you need to have renewable energy technologies like: 

• Solar panels 
• Wind turbines 
• Hydroelectric systems 
• Anaerobic digestion 
• Micro combined heat and power (micro-CHP) 

For micro-CHP systems, your electricity capacity must be 50 kW or less. For other technologies, the capacity must be 5 MW or less. 

As long as your renewable system is certified under the Microgeneration Certification Scheme (MCS) or an equivalent standard, and you have a registered smart meter that records your exported electricity, you could be eligible for the SEG. 

What are the SEG rates? 

SEG tariffs are flexible and can vary from one supplier to another. The main rule is that the tariff must always be greater than zero, but beyond that, suppliers are free to set their rates. This means the SEG rate isn’t fixed, and you could end up with either a: 

• Fixed SEG tariff: A set rate per kWh of electricity exported for the duration of your contract. 
• Variable SEG tariff: A price that fluctuates based on market demand, as long as it never falls below zero. 

You’ll want to compare SEG rates to find the best deal for your home or business. 

How to apply for a SEG tariff 

To start receiving SEG payments, you’ll need to apply directly to an energy supplier that offers this tariff. Ofgem publishes a list of SEG licensees each year, and the supplier you choose doesn’t have to be the same one that supplies your energy. 

Take some time to shop around and compare different SEG suppliers to find the best rate for you. 

Can I combine SEG with other grants and financial support? 

Yes, you can. SEG payments are separate from other financial support you might receive for your renewable energy installation. So, if you qualify for other grants or financial assistance, you can still benefit from SEG payments as well. 

Just keep in mind that you can’t receive SEG payments from more than one supplier at the same time. But you can switch if you find a better deal elsewhere. 

What if I already receive Feed-in Tariff (FIT) payments? 

If you're already receiving Feed-in Tariff (FIT) payments for your renewable energy system, you’ll continue to receive these payments until the end of your FIT contract. The SEG won’t affect your FIT generation payments. 

If you’re receiving FIT export payments, you can opt out of these and switch to SEG payments instead. But keep in mind that you can't get both FIT export payments and SEG payments simultaneously. 

The FIT scheme closed to new applicants in 2019, which is why the government introduced the SEG—to ensure small-scale renewable energy generators still receive compensation for exporting electricity to the grid. 

Can I apply for SEG with an energy storage system? 

Yes! If your renewable energy setup includes an energy storage system—like a battery that stores electricity from the grid or your renewable system before exporting it later—you can still apply for SEG. 

Keep in mind that energy suppliers don’t have to pay for non-renewable electricity that’s exported, though some may choose to.  

If your system uses both renewable and non-renewable electricity, suppliers might ask you to prove which electricity comes from your renewable setup. This is something you can discuss with your installer to make sure everything’s correctly separated. 

What are the alternatives to SEG tariffs? 

Besides SEG, some energy suppliers offer their own export tariffs or schemes to pay you for the electricity you export. These deals can vary depending on your household, so it’s important to check the terms and conditions carefully. For example, some deals might require you to buy your energy from the same supplier. 

It’s worth noting that some deals are time-limited, so you’ll want to be sure you’re getting the best rate for your exported electricity. 

To help you compare, the Solar Energy UK website regularly updates a league table of the best SEG tariffs, so you can stay informed and pick the best option for you. 

The Smart Export Guarantee can be a great way to get paid for your renewable energy, but there are a few things to keep in mind. Make sure you meet the eligibility requirements, compare suppliers, and stay informed about the latest rates to make the most of this opportunity.