The Smart Export Guarantee: explained

In January 2020, the UK government introduced a new scheme called the Smart Export Guarantee, designed to financially reward households for exporting their surplus clean electricity to the national grid.

For homes with solar photovoltaic (PV) panels, export tariffs like the SEG are a great way to bolster your energy bill savings. In this article, we'll explore how the SEG works, the benefits for solar PV system owners, and how it's shaping greener living in the UK.

If you’re thinking of making the switch to solar, you can find out how much a solar & battery system could save you by answering a few quick questions below.

What is the Smart Export Guarantee?

The SEG is a UK government initiative that supports renewable energy generation by providing households with a financial reward for their surplus electricity. 

This arrangement covers more than just solar - it also includes wind, hydroelectric, anaerobic digestion, and micro-combined heat and power (CHP) technologies.

The SEG is all about incentivizing renewable energy production and consequently making households rely less on the national grid.

How does the Smart Export Guarantee work?

Under the SEG, energy providers with over 150,000 customers (officially called SEG licensees) must offer a tariff that pays households and small businesses for any renewably-sourced electricity that they export to the grid. 

SEG licensees are free to set the rates for these tariffs and they can be fixed or variable, but your chosen SEG tariff provider doesn't have to be the same as your primary energy provider. However, most energy providers typically offer their best export tariffs to customers. 

It’s also important to note that the SEG isn’t a government subsidy and the payments aren’t guaranteed. The rates and availability of tariffs will depend on the supplier and current market conditions.

How much money can you earn with the Smart Export Guarantee?

Your potential SEG earnings can vary depending on the tariff and supplier. Typically, SEG licensees pay out anywhere between 2-15p for every kilowatt-hour (kWh) of exported electricity.

With that being said, some of the most lucrative export tariffs on offer today aren’t actually connected to the SEG, and they often don’t require you to generate your electricity with a renewable source. In reality, all you need in order to achieve flexible import and export is a storage battery. 

For instance, the Intelligent Octopus Flux tariff (set up by Octopus Energy) allows customers to import electricity when it's cheap and export electricity when prices are higher. This differs from their SEG tariff - called Outgoing Octopus - which provides a fixed rate of 15p per kWh.

A typical UK household with a solar & battery system (using 430W panels and a 5.8kWh battery) that’s signed up to the Octopus Flux tariff could earn around £600 each year. This estimate is based on 32 of Sunsave’s own solar & battery system designs from households all over England and Wales.

You can receive SEG income regardless of whether you've paid the upfront cost of solar panels or if you've opted for a solar subscription.

What is currently the best Smart Export Guarantee rate?

The 'best' solar export tariff for a household depends on a few factors, but the highest rate right now is Intelligent Octopus Flux, provided by Octopus Energy. This offers changing rates that reflect the wholesale market, so selling excess electricity at peak times could earn you up to 35p per kWh (depending on your location in the UK). This tariff is only for customers who also buy their electricity from Octopus Energy, however it's usually fairly easy to switch.

Sunsave has a partnership with Octopus Energy, which means that if you install a Sunsave Plus solar & battery system (at no upfront cost), you will gain priority access to the Intelligent Octopus Flux tariff. If you'd like to sign up for Intelligent Octopus Flux, click here.

However, there are alternative situations where other export tariffs might be a better choice...

If you have solar panels and a heat pump

Providing your system is smaller than 5 kWp, you might be better off with Cosy Octopus for your imports and Octopus Outgoing for your exports. However, if your system is larger than 5.2 kWp, you will probably still be better off with Intelligent Octopus Flux.

If you have solar panels and an electric vehicle

Assuming your annual electricity usage is greater than 5,000 kWh (including charging your EV), you should probably choose Intelligent Octopus Go. However, if your usage falls below 5,000 kWh, Intelligent Octopus Flux will most likely be your best option.

If you have solar panels, a heat pump, and an electric vehicle

Again, it all depends on electricity usage. If your annual consumption is more than 6,000 kWh (including powering your heat pump), it's usually better to be on Intelligent Octopus Go, but if your consumption is lower than 6,000 kWh then Intelligent Octopus Flux is typically a better choice.

Of course, the best export tariff for your system could change - the above situations are just rough recommendations. If you choose to install a Sunsave solar & battery system, we will help to select the right export tariff for you.

Are Smart Export Guarantee rates increasing?

Our analysis of the Ofgem SEG reports from 2020 to 2023 show that the average solar export tariff has increased since the SEG launched. It started at an average of 3.15p/kWh in 2020, jumping to 4.52p in 2021, and then up to 6.78p in 2022. Based on the current available solar export tariffs, the average rate for 2023 is 9.78p/kWh - that's more than a 200% increase in three years.

Average UK solar export tariff, 2020-23

The pros and cons of the Smart Export Guarantee

If you’re wondering how much a solar & battery system could save you, answer a few quick questions below and we’ll provide you with an estimate.

Is it worth signing up for the Smart Export Guarantee?

The SEG is definitely worth joining - it's free to sign up and you can make some extra cash.

It's a no-brainer for those generating renewable energy, as it provides financial compensation for any surplus electricity exported to the grid, effectively turning your environmental contribution into an economic benefit.

What are the requirements for the Smart Export Guarantee?

To be eligible for the SEG, your system must meet the following requirements:

• The electricity generated needs to come from renewable sources, such as solar panels, wind turbines, or hydroelectricity.
• The maximum capacity of the system must not exceed 5 megawatts (MW), or 50 kilowatts (kW) for micro CHP systems.
• The system must have a registered smart meter capable of measuring exported electricity.
• The system must have a valid Microgeneration Certification Scheme (MCS) certificate.
• Your property must have a valid Energy Performance Certificate (EPC) rating of D or above.

Once these conditions are met, you can apply for a special export tariff with an SEG licensee, who will then pay you for any excess electricity you generate and export back to the grid.

Remember, individual energy suppliers set the rates for this tariff, so they can vary. The payments are typically made quarterly and are based on the amount of exported electricity, as recorded by your smart meter. To learn more, check out our guide to how smart meters work with solar panels.

What if I don’t have a smart meter?

If you don't have a smart meter and want to get involved in the SEG scheme, you'll need to install one. 

One of the scheme’s key requirements is your household’s ability to provide precise export readings every 30 minutes, so speak to your current energy supplier to book a smart meter installation.

How do you sign up for the Smart Export Guarantee?

First, you need to contact an SEG licensee that offers export tariffs in your area and fill out their SEG application form. 

The SEG licensee will ask you for documents to ensure that your solar PV system meets the SEG requirements for eligibility (see above) - this includes having a smart meter installed and a valid MCS certificate.

Once you’ve submitted your application, the licensee will apply to the Distribution Network Operator (DNO) for a unique export Meter Point Administration Number (MPAN), if your supply doesn’t already have one.

After the licensee approves everything, you’re all set - you can start exporting any excess electricity to the grid and get paid for it.

How long does it take to sign up?

Signing up for the SEG can take around 28 days, depending on the specific SEG licensee.

It typically involves a few steps, including making sure you have all the right documents for processing and any necessary meter installations or inspections. It's a good idea to check with your SEG licensee for specific timeframes.

Is it easy to switch Smart Export Guarantee tariffs?

Switching SEG tariffs can be relatively straightforward, but it depends on the terms set by your current and prospective energy suppliers.

You'll need to check the terms of your existing SEG contract for any conditions or penalties associated with early termination. If there are no limitations (or you’ve passed the minimum contract term), you can easily switch to an SEG licensee with a more attractive tariff.

Just like switching energy suppliers, it involves contacting the new supplier and completing their sign-up process.

Are Smart Export Guarantee rates expected to increase?

We can't predict the future, but it's possible that SEG rates might continue to rise like they have done since the scheme began. As the value of clean electricity grows because of rising energy costs, it wouldn't be surprising if SEG rates went up too.

However, these rates are subject to various market and government policy factors, so while an increase is possible, it's not guaranteed.

If you’re wondering how much a solar & battery system could save you, answer a few quick questions below and we’ll provide you with an estimate.

Smart Export Guarantee: FAQs