What is the Smart Export Guarantee (SEG)? A Simple Guide
Generating your own electricity with solar panels is a fantastic [...]
Generating your own electricity with solar panels is a fantastic way to cut your bills. But what happens on those bright, sunny days when your system produces more power than your home is actually using? That surplus energy doesn’t have to go to waste. Thanks to a government scheme, you can sell it back to the grid and get paid for it.
This scheme is called the Smart Export Guarantee (SEG). It’s a straightforward and simple way for homeowners with renewable technology to earn a bit of money from the green energy they produce. It’s a rewarding final step in the journey to a more sustainable and cost-effective home.
How Does the Smart Export Guarantee Work?
The SEG is a government-backed initiative that requires large energy suppliers in Great Britain to pay small-scale generators, like homeowners with solar panels, for the electricity they export to the National Grid.
The SEG process is simple:
- Your renewable energy system, like a 4kW set of solar panels, generates electricity during the day.
- Your home automatically uses this free, green electricity first to power your appliances.
- Any electricity you don’t use, for example, because you’re out at work, is automatically sent back to the grid.
- A smart meter records exactly how much electricity you’ve exported, down to the half-hour.
- Your chosen SEG supplier then pays you for every unit (kilowatt-hour or kWh) you’ve sold back.
All energy suppliers with over 150,000 customers are legally required to offer at least one SEG tariff, which means you have a competitive market to choose from.
What Technologies are Eligible for the SEG?
While solar panels are the most common, the SEG actually covers a range of renewable energy systems. As long as your system has a capacity of 5MW or less (a typical domestic solar PV system is only 3-6kW), you can get an SEG tariff.
The eligible technologies include:
- Solar Panels (PV): The most popular choice for homes, turning daylight directly into electricity.
- Wind Turbines: Suitable for properties with the right space and conditions.
- Hydro: Micro-hydropower systems that use flowing water.
- Micro Combined Heat and Power (micro-CHP): Systems that generate heat and electricity simultaneously, often using gas. This is different from modern heat pumps, which are a more common low-carbon heating solution.
- Anaerobic Digestion: A technology that produces energy from organic waste.
To be eligible, your installation must be certified by an appropriate body, like the Microgeneration Certification Scheme (MCS), to prove it meets quality and safety standards.
The Big Question: How Much Can You Earn?
This is the most common question, and the answer is that there is no single, fixed rate for the SEG. The only rule set by the energy regulator, Ofgem, is that the rate must always be above zero.
This means that energy suppliers compete with each other, offering different types of tariffs.
- Fixed-Rate Tariffs: These are the most common. You get paid a set price, for example, 12p, for every kWh you export.
- Variable-Rate Tariffs: Some suppliers offer tariffs that change based on the time of day, tracking wholesale energy prices. This means you could get paid more for exporting power at peak times when demand is high.
A typical household with a 4kW solar panel system might export around 2,000 kWh of electricity per year. On a fixed tariff of 10p/kWh, that would equate to £200 a year—a welcome bonus on top of your bill savings. To see a list of official SEG licensees and get the most up-to-date information, the energy regulator, Ofgem, provides the official guidance.
Can You Combine the SEG with Installation Grants?
Yes, absolutely. This is a key point that often causes confusion. The SEG and the grants available for installing renewable technology are two completely separate things.
- Installation Grants: These are designed to help you with the upfront cost of getting the technology installed. Schemes like the Boiler Upgrade Scheme or other support available through the ECO scheme can help make the initial investment much more affordable.
- The SEG: This is a mechanism for you to earn money from your system’s ongoing performance after it has been installed.
You can be approved for a grant to help you install your solar panels and then, once the system is up and running, sign up for an SEG tariff to sell your surplus power.
How to Apply for the SEG
Once your renewable energy system has been installed and certified, the SEG process for applying for a tariff is straightforward.
- Choose a Supplier: You don’t have to get your SEG tariff from your current electricity supplier. You are free to shop around and choose the company that offers the best rate.
- Gather Your Documents: You will need to provide proof of ownership of your system and, most importantly, your MCS installation certificate. This is the key document that proves your system is eligible.
- Complete the Application: You’ll need to fill out a simple application form with your chosen supplier. They will also require details of your smart meter to ensure they can accurately measure your exported electricity.
The process usually takes around four weeks from application to approval, and once you’re set up, you’ll start earning money for every bit of green energy you send to the grid.
Getting Your Home Ready for the SEG
The first step in earning money from the SEG is, of course, having an eligible renewable energy system installed. The upfront cost of this can be a significant hurdle for many homeowners, and figuring out the rules for the available grants can be a complicated process.
That’s where So Eco makes things easier. Our role is to guide homeowners through the entire funding process. We help you find out if you’re eligible for the various grants and funding options, handle the tricky paperwork, and arrange the necessary surveys. Once your application is approved, the improvements are scheduled and carried out to scheme standards, making the whole journey straightforward from start to finish.
Your SEG Questions Answered
Do I need a solar battery to get an SEG tariff?
No, you don’t. You can export power directly from your panels. However, many people find it’s more financially beneficial to store their excess energy in a solar battery and use it themselves in the evening. This is because the money saved by not buying electricity (at ~25p/kWh) is usually much more than the money earned from selling it (at ~10p/kWh).
Can I switch my SEG provider?
Yes. You are not locked into a single provider. You are free to shop around and switch to a different company if they offer a better rate, just like with your regular energy supply.
What if I previously had the Feed-in Tariff (FiT)?
The SEG replaced the FiT scheme, which closed to new applicants in 2019. If you are still receiving FiT payments, you cannot also receive SEG payments. You would have to formally opt out of the FiT scheme to switch to the SEG, which may or may not be financially beneficial depending on your original FiT rate.
Is a smart meter required for the SEG?
Yes, a smart meter that is SMETS2 or newer and capable of measuring your exported electricity (usually on a half-hourly basis) is essential. Your chosen supplier needs this to accurately track how much power you are selling back to the grid. If you don’t have one yet, your energy supplier can usually arrange to have one installed.
Ready to Start Your Renewable Journey?
Before you can start earning money from the SEG, you need an approved renewable energy system. To find out if you could get help with the installation costs through a government-backed grant, the first step is to check your eligibility.
Our online tool is quick, free, and can give you a clear idea of the support you might be able to get. Let us handle the complexity so you can focus on the benefits of a cheaper, greener home.
