Smart Export Guarantee explained

The Smart Export Guarantee (SEG) is a government-backed scheme that means you can get paid for renewable electricity you've generated and not used. 

This scheme replaced the feed-in tariff (FIT) scheme in 2020. The FIT scheme still pays many solar panel owners for the electricity they generate at home, but it is now closed to new applicants. 

All large energy suppliers – with more than 150,000 domestic electricity customers – must participate in the SEG. They are known as mandatory SEG licensees. Smaller energy suppliers can also participate as voluntary SEG licensees.

We explain below how you can get a SEG tariff for your home's renewable energy system, and how much you could earn.

Find out more: How much do solar panels cost?

What is the Smart Export Guarantee?

Under the Smart Export Guarantee, SEG licensees pay households for the excess renewable electricity they generate but don’t use themselves. The following renewable technologies are eligible:

• Solar photovoltaic panels (solar PV)
• Wind
• Hydro
• Micro combined heat and power (CHP)
• Anaerobic digestion.

Although the SEG scheme guarantees payment for homeowners putting excess renewable electricity into the grid, it does not set the price and payments do not happen automatically. You have to sign up to a SEG tariff, otherwise you won’t get paid for the electricity you export. If you don't have a SEG contract, the National Grid gets your excess power free of charge.

According to energy regulator Ofgem, during the year April 2022 to March 2023:

• 39 SEG tariffs were offered by 14 providers
• 24 of these tariffs were unbundled and 15 were bundled - bundled tariffs are only available if additional conditions are met, for example, if import electricity is purchased from the same supplier, or if you purchase or use certain products
• £7.19m was paid to SEG generators, compared with £1.66m in 2021-22
• 77.3 GWh of low carbon electricity export was recorded - enough to make approximately 1.85 billion cups of tea. This is a significant increase on the 24.4 GWh exported in 2021-22
• Solar PV made up more than 99.9% of installations registered (92,916) and installed capacity (495,832 kW).

Is the Smart Export Guarantee worth it?

Whether the SEG is a worthwhile choice for you depends on a number of factors.

If you receive FIT payments

If you currently receive FIT payments, it is generally not worth switching to a SEG tariff. FIT rates, especially from the earlier years of the scheme, are usually much higher than any current SEG tariff, are guaranteed for a fixed period (normally 20 or 25 years), and are index-linked. 

Read more on this below.

If you don't receive FIT payments

If you're not eligible for FIT, the main factors that will affect your SEG payments include:

• How much energy you generate in total
• How much of the generated energy you use yourself, and therefore how much is left over to export to the grid
• Whether you have a storage battery.

We've made some calculations below to help you decide whether it's worth it for you.

How much could I earn with solar panels and the Smart Export Guarantee?

Installing solar panels and signing up to a SEG tariff should help you save money in the long term. You can benefit in two ways:

1. The biggest saving comes from buying less electricity from your energy supplier. Every unit (kWh) of self-generated power is one less unit of energy you have to buy from a supplier. At the current price cap rate (24.5p/kWh) that means you save 24.5p for each kWh of self-generated energy you use yourself.
2. You can generate payments by selling any surplus energy to the National Grid, through a SEG licensee. The rates vary, but are almost always lower than the current price cap rate; therefore, it's more cost-effective to use as much of your self-generated energy as possible - or store it in a battery.

Companies set their own SEG tariff prices, so you’ll need to shop around to make sure you get the best rate. Companies must pay more than zero, but there can be big differences between the best and the worst. 

When we checked widely available tariffs in April 2024, we found companies paying fixed SEG rates between 1p/kWh and 20p/kWh (and up to 30.86p/kWh during peak hours with Octopus Energy's Intelligent Flux tariff).

This could mean a 20-fold difference in your payments, which would add up to a significant amount over a year if you exported 1,500kWh to the grid:

• Highest fixed SEG rate (20p/kWh) = £300

• Lowest SEG rate (1p/kWh) = £15

For context, a 4kWp solar system could generate 3,410kWh electricity in a year. The amount you export depends on how much of the energy you generate you use. The average medium-use household uses 2,900kWh electricity over a year so you could end up exporting a lot less than this, especially if you're at home all day as you would use more than if you were out for most of the day.

Smart Export Guarantee

Your individual bill savings and SEG earnings will depend on:

• How much electricity you export to the grid
• Your export tariff rates
• Time of export (if the SEG has a time-variable rate)
• How much of the electricity you use yourself
• The price you pay for electricity.

So if you’re considering installing renewable generation, take these into account against the cost of installing the system and maintenance costs to work out how long it’ll take your system to pay for itself.

Find out more about solar PV maintenance.

If you fit a home battery, you’ll be able to store and use more of the electricity you have generated, helping you save more on your electricity bill. However, different tariffs have different rules around whether they’ll pay for electricity stored in a battery, especially if some of it could be ‘brown’ electricity from the grid.

Check what your chosen SEG company’s rules are. If it will pay for stored electricity then you could earn more with a flexible tariff by storing electricity to export at times when rates are higher. But you’ll also need to take into account the initial cost of the battery.

Read more about solar panels and energy storage.

Which companies have Smart Export Guarantee tariffs?

All companies with more than 150,000 electricity customers have to offer a SEG tariff. 

As of April 2024, mandatory SEG licensees include: British Gas, E, E.ON Next, EDF, Octopus, OVO, Scottish Power, SO Energy, Utilita, and Utility Warehouse.

They must offer at least one SEG tariff that is export-only, and therefore available to all eligible generators, not just their customers.

That means you can choose a different supplier to sell your renewable electricity to than the one that you buy electricity from; however some firms will pay for your exports into your energy account with them if you are a customer, which might be convenient. 

Some tariffs offer a better export rate if you buy your energy from the same company - currently, most of the highest SEG tariffs are only available to customers. Others offer exclusive rates if you installed your solar panels and/or battery through them, such as the tariff from OVO used in our calculations above.

Smaller companies that are not mandated SEG licensees can choose to offer export tariffs, such as Good Energy's Solar Savings tariff.

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Battery-specific SEG tariffs

The Intelligent Octopus Flux tariff requires you to have solar panels, an eligible battery, and the Octopus Energy app on your smartphone or tablet. 

This smart import-and-export tariff allows you to generate, import and store energy, which Octopus will export at a time when prices are highest, maximising your payments.

The tariff offers rates up to 30.86p/kWh at peak times - although this applies to both import and export, so you'll need to make sure you don't need to use energy from the Grid during that time.

To be eligible for Intelligent Octopus Flux, you need solar panels and a GivEnergy battery, but they don't need to have been installed by Octopus.

Other battery-specific tariffs include OVO's SEG Tariff, which pays 20p/kWh at any time of the day but requires you to buy solar panels, a battery, and grid electricity through OVO, and Good Energy's Solar Savings tariff, which pays 15p/kWh at any time, for customers with solar panels and a battery (the rate increases to 20p/kWh if your panels/battery were installed by their subsidiary Wessex ECOEnergy).

Types of Smart Export Guarantee tariff

There are two main types of Smart Export Guarantee tariffs: Fixed rate or flexible rate

Fixed rate SEGs have a set amount that they pay per kilowatt hour of electricity you export to the grid, regardless of when you export it. Most of the SEG tariffs on offer at the moment follow this pattern.

Flexible rate SEGs pay varying amounts depending on how valuable the electricity is to the system at different times. For example, they may be tied to day-ahead wholesale prices. So you'll be paid more for exporting electricity at a time when there is a high demand for it (in the evening, for instance). Octopus Energy’s Outgoing Agile tariff is this type.

Companies might also offer multi-rate SEGs where there are different set rates for electricity exported at different times, such as day and night rates, or weekday and weekend rates, such as with Octopus's Flux tariff for those with solar panels and a storage battery.

The price you are paid must not be below zero at any time.

To complicate things, some companies are offering tariffs where the price (per kWh of electricity) is fixed for the duration of the contract, while others are offering variable rates. A variable rate means they can change the price of the tariff depending on whether they want to pay more or less for your electricity. You should be given 30 days’ notice though.

Can I get a Smart Export Guarantee tariff?

If you install solar panels, a wind turbine, or other renewable generation at home, you should be able to sign up to a SEG tariff.

You’ll need to meet certain criteria though, including the following:

• Your installation must be 5MW capacity or less (50kW for micro-CHP).
• You’ll need a meter that can provide half-hourly readings for electricity export.
• Your installation must be MCS-certified.

In practice, to provide half-hourly meter readings it's likely that you will need a smart meter. Although the government told us that it’s ‘still possible to enjoy the benefits of SEG without a smart meter’, you’ll need more than a traditional electricity meter because these cannot take half-hourly readings. Some advanced meters can do this or ‘any other type of export meter’, according to the government, but you’ll need to get one of these installed. 

Find out more: what you need to know about smart meters

However, we’ve heard from Which? members who have been refused smart meters because of their solar panels. So make sure that you get a second-generation smart meter that can take export meter readings if you’re considering installing renewable technology.

MCS certification involves choosing a product and using an installer that are approved by the microgeneration certification scheme (MCS). This is a quality-assurance scheme for renewable technologies, meaning that companies and products meet high standards. Find out more about the MCS here.

If you have installed solar panels or another renewable system since the FIT closed, you should be able to sign up with a supplier offering SEG payments as long as you meet the criteria. You won’t be able to claim back payments from before you signed up to a SEG tariff though.

What is the difference between the Smart Export Guarantee and feed-in tariff?

The FIT paid households that produced their own electricity using renewable technologies. It closed to new applicants at the end of March 2019.

If you're considering which is best for you, these are the main differences.

I already get the FIT. Should I change to the SEG?

If you're already signed up to receive FIT payments, you will continue to do so for the remainder of your contract (usually around 20 years). The SEG is aimed at those who have installed new renewable technology since the closure of the FIT scheme.

The FIT rates were very generous when the scheme first launched so it’s unlikely that you will earn as much from switching to a SEG tariff compared with your feed-in tariff. It's worth comparing your rates and payments against the latest SEG tariffs - but remember that SEG tariffs may go down in future.

SEG tariffs will pay you only for the exact amount of electricity you export, whereas feed-in tariffs estimate your export at 50% of what your system generates – meaning that if you use more than 50% of your electricity you’ll be even better off.

However, if you opt out of receiving your FIT export payments, you can sign up to get SEG export payments instead.