Those wondering how to sell electricity back to the grid needn’t look much further than the Smart Export Guarantee (SEG).

The SEG launched in January 2020 following the closure of the Feed-in Tariff scheme and allows households to sell excess electricity created by renewable technology back to the National Grid.

By selling electricity back to the grid, households can generate additional revenue to offset the cost of their initial installation and make a more sustainable choice regarding energy.

The SEG is managed by Ofgem and works on behalf of eligible suppliers who must provide consumers with a payment for any exported electricity they export back to the grid.

How does the Smart Export Guarantee work?

Households across England, Wales and Scotland could benefit from an SEG tariff, which will allow them to export electricity from renewable sources back to the grid.

These tariffs will provide households with a payment for any exported electricity they send back to the grid – we’ll touch on how much you could receive later on.

As part of the Smart Export Guarantee, every energy company with 150,000 or more customers must offer at least one SEG tariff.

What does the SEG process look like?

The process is simple and straightforward: install an eligible renewable energy technology, then register with an eligible supplier and choose an SEG tariff.

Energy use in the property will be monitored and if more energy is generated than used in the home, this excess electricity can be sold back to the National Grid at set rates.

Customers will then receive payments once they start exporting excess electricity made from renewable sources back to the National Grid.

What renewable energy can I use to benefit from the SEG?

While the SEG is most commonly known as a way of selling solar energy to the grid, there is actually a range of renewable energy options to pick from to benefit from a Smart Export Guarantee tariff.

Considering renewable energy accounts for nearly 15% of the UK’s energy generation, the SEG is an excellent way to give back to those producing green energy.

To qualify for an export tariff through the SEG, you must have at least one of the following systems:

  • Micro combined heat and power (micro-CHP)
  • Wind power
  • Hydropower
  • Anaerobic digestion

Solar PV system

The most common method of selling electricity to the grid is through a solar photovoltaic (PV) system. These low-carbon systems use sunlight to generate electricity, which can then be exported back to the National Grid.

Any solar PV system can be used to benefit from an SEG tariff as long as they create less than 5 MW of electricity. However, if your system creates less than 50kW of energy, you must prove your installer is certified in addition to an installation certificate.

The amount of money you receive will depend on your PV system and the SEG tariff you chose, with the cost greatly depending on the supplier.

Some suppliers cover solar battery storage as part of their SEG tariff, but properties will only get money for the energy they sell back to the grid. Any energy stored and not sold will not receive payment.

If you’re considering installing a solar panel system but aren’t sure how effective solar panels are in the UK, check out our blog post. Alternatively, you can discover how many solar panels you need for your home.

Micro-CHP

Micro combined heat and power is a type of small-scale combined heat and power (CHP) system, which produces both heat and electricity.

It works by burning fuel such as natural gas, biogas or wood pellets to generate energy. This energy is then used to produce hot water and electricity at the same time.

The excess electricity created can be sold back to the grid and customers will receive payments for the energy they export through an SEG tariff.

While it’s not always carbon-free, they are considered a way of reducing emissions as they accomplish two tasks at once.

Wind power

Accounting for 20% of the UK’s energy consumption, wind power is by far the UK’s leading renewable power source.

While it’s most commonly used on large-scale farms, wind power can be used in households (just on a much smaller scale, obviously!)

The qualifications for wind power under the SEG are the same as solar, meaning that if your system produces between 50kW and 5 MW of energy, you only need to show proof of your installation certificate to benefit from the SEG.

Households with systems that produce below 50kW will need to show both an installation and installer certificate.

Hydropower

Generated from water, hydropower is another popular choice for renewable energy in the UK.

Hydropower works by using the force of water to rotate a turbine and generate electricity, which can then be sold back to the grid.

To benefit from an SEG tariff from hydropower, your system must produce between 50kW and 5 MW of energy. If you have a smaller hydropower system (below 50kW), you’ll need to present both an installation and installer certificate.

Anaerobic digestion

The last renewable option for the Smart Export Guarantee is anaerobic digestion.

By breaking down organic materials to produce biogas, anaerobic digestion produces electricity, which can then be sold back to the grid under the SEG.

Materials, like manure, wastewater and food waste, are broken down by microorganisms in an oxygen-free environment to create a natural gas (usually methane).

This process is ideal for farmers, as it’s also a great way to improve soil quality and manage waste.

Much like hydropower, only an installation certificate is required to benefit from an SEG tariff.

How much will I receive from the Smart Export Guarantee?

There is no universal set tariff when it comes to the SEG. The only requirement is that it must be more than zero at all times.

How much you get from selling energy back to the grid entirely depends on the rate the energy supplier offers, with each energy supplier offering different Smart Export Guarantee rates. The highest current rate is 15p per kWh.

These tariffs can be fixed or variable, with fixed tariffs paying a set rate per kWh of electricity exported. Variable tariffs will vary with market demand, with the only requirement being that it never drops below zero.

The best way to ensure you get a good rate is by shopping around and comparing SEG tariffs from different suppliers.  You should also ask your installer about any discounts or additional incentives they offer.

Can I combine the SEG with other government grants?

Yes, you can combine the Smart Export Guarantee with other government grants as they are not linked to other financial support around renewable energy installation.

The only way you cannot benefit from the SEG is if you have already received payments from the Feed-in Tariff (FIT) scheme. However, you can opt out of your FIT payments and switch to SEG payments instead.

The ECO 4 Scheme is the UK’s leading renewable energy installation scheme, offering heavily discounted (and sometimes free) home upgrades. These can include solar panels, heat pumps and insulation, and you can find out if you qualify for the ECO Scheme in our blog post.

Alternatively, you could learn about the many grants for solar panels in Wales and the rest of the UK.

How to apply for the Smart Export Guarantee

Applying for the Smart Export Guarantee is simple.

The first thing you need to do is locate an SEG licence in your area. This could be different from your current energy supplier, as different providers offer more competitive rates and you may wish to compare

There are some requirements you must first meet before an energy supplier allows you to benefit from the SEG. These include:

  • Your proof of ownership of the renewable system.
  • Your MCS certification or something equivalent.
  • An up-to-date smart meter reading. A half-hourly export reading is also suitable.
  • Your application form for the SEG.
  • A separate form is also required for anaerobic digestion.

The average processing time after your form has been submitted is 28 days, and once your application is approved, you will then receive an SEG contract outlining the terms and conditions of the scheme.

Upgrade your home for less

Thank you for reading our post about the Smart Export Guarantee. We hope you have learnt something new and are able to earn money from the excess electricity your renewable energy system creates.

Homes looking to upgrade their home with renewable energy at a low cost should look no further than So Eco.

We are qualified installers of the ECO and Great British Insulation Schemes, helping homes around the UK save hundreds on the cost of their renewable energy installation. Better yet, these improvements can lead to major savings on your energy bills in the long run.

To learn more about how you could qualify for a renewable energy grant, simply use our online eligibility checker today.

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