UK Smart Export Guarantee (SEG): Top Tariffs and Switching Guide

Key Takeaways

• The Smart Export Guarantee (SEG) pays small-scale generators for electricity exported to the National Grid.
• Electricity suppliers (SEG licensees) determine the export rates and contract terms, not Ofgem.
• Installations must be located in Great Britain and meet specific capacity limits, such as 5MW for solar PV.
• You can compare and switch SEG tariffs between any SEG licensee, not just your current energy supplier.

What is the Smart Export Guarantee (SEG)?

The Smart Export Guarantee (SEG) is a government-backed initiative launched on 1 January 2020. It is regulated by Ofgem. This scheme enables small-scale generators to receive payments from electricity suppliers for electricity which they export back to the National Grid.

The SEG was established under the powers conferred by sections 41(4), 43(3)(a) and 104(2) of the Energy Act 2008, and formally enacted by The Smart Export Guarantee Order 2019. Ofgem was mandated to publish guidance to SEG generators and SEG licensees on the operation of the SEG before 1 January 2020.

Who is Eligible for SEG Payments?

To qualify for SEG payments, your electricity generation installation must meet specific criteria regarding its location, technology, and capacity.

Location and Technology

Your installation must be located in Great Britain. The eligible technologies include:

• Solar photovoltaic (solar PV)
• Wind
• Micro combined heat and power (micro-CHP)
• Hydro
• Anaerobic digestion (AD)

Capacity Limits

Most eligible technologies, such as solar PV, wind, hydro, and anaerobic digestion, must have a total installed capacity (TIC) of no more than 5MW. For micro-CHP installations, the total installed capacity must be no more than 50kW. The specified maximum capacity is 5 megawatts of total installed capacity.

Anaerobic Digestion (AD) Specific Requirements

AD installations have additional sustainability and reporting requirements. A SEG generator must confirm that it has sought SEG payments only for electricity exported by the AD installation generated using sustainable biogas. This involves providing quarterly declarations on biomass feedstock for biogas and annual declarations on total electricity generated, feedstock type, and the proportion of non-waste/residue energy content.

Furthermore, AD installations must meet specific greenhouse gas (GHG) emission criteria for biogas:

• For biogas used to generate electricity before 1 April 2020, emissions must be equal to or less than 66.7 grams per megajoule of electricity.
• For biogas used to generate electricity on or after 1 April 2020 but before 1 April 2025, emissions must be equal to or less than 55.6 grams per megajoule of electricity.
• For biogas used to generate electricity on or after 1 April 2025, emissions must be equal to or less than 50 grams per megajoule of electricity.

An annual audit report is required for AD installations with a total installed capacity of 1 megawatt or above.

How Do SEG Tariffs Work?

The Smart Export Guarantee operates differently from previous schemes because it places the responsibility for setting export rates directly with electricity suppliers.

Tariff Setting and Rates

SEG Licensees (electricity suppliers) determine the rate, contract length, and other terms which SEG Generators will receive. Ofgem's primary requirement is that any SEG tariff offered must always remain above zero. This means there is no single, fixed SEG rate across the market; rates can vary significantly between different suppliers.

Payment Calculation

SEG payments are calculated by using actual export meter readings. This ensures that you are paid for the precise amount of electricity your installation exports to the National Grid.

Choosing Your SEG Licensee

You have the flexibility to choose your SEG licensee. You can apply for a SEG tariff with any SEG licensee – your SEG licensee does not need to be the same company as your current energy supplier. This allows you to shop around and compare offers to find the most suitable tariff for your exported electricity. All licensed electricity suppliers are required to participate in declaring their SEG status on an annual basis, and SEG licensees must offer a SEG tariff to all eligible generators.

Metering Requirements for SEG

Accurate metering is fundamental to the Smart Export Guarantee scheme, as payments are based on the quantity of electricity exported.

Meter Provision and Standards

Where electricity is supplied (and by extension, exported for payment), the quantity of electricity must be ascertained by an appropriate meter. If the authorised supplier agrees, the meter may be provided by the customer. Otherwise, it shall be provided by the authorised supplier.

No meter shall be used for ascertaining the quantity of electricity supplied by an authorised supplier to a customer unless the meter is of an approved pattern or construction and is installed in an approved manner. Furthermore, the meter must be certified. No meter shall be certified unless the examiner is satisfied that the meter is of an approved pattern or construction and that it conforms to such standards (including standards framed by reference to margins of error) as may be prescribed.

Meter Maintenance

Maintaining the meter in proper working order is crucial for correct registration. A customer of an authorised supplier shall at all times, at their own expense, keep any meter provided by them in proper order for correctly registering the quantity of electricity supplied to them. Similarly, an authorised supplier shall at all times, at their own expense, keep any meter provided by them to any customer in proper order for correctly registering the quantity of electricity supplied.

Comparing SEG Tariffs and Switching Suppliers

Since SEG licensees set their own rates and terms, comparing offers is essential to maximise your earnings from exported electricity.

Finding and Comparing Tariffs

There is no central list of current SEG tariff rates, as these are determined by individual suppliers. To find the best rates, you will need to contact different SEG licensees directly and inquire about their current offers. Ofgem publishes an annual list of all SEG licensees, distinguishing between mandatory and voluntary licensees, which can help you identify potential suppliers to contact.

When comparing tariffs, consider not only the pence per kilowatt-hour rate but also the contract length and any other terms offered by the licensee. Some tariffs may offer fixed rates, while others might be variable, tied to wholesale electricity prices.

Switching Your SEG Supplier

The SEG framework allows you to switch your SEG licensee. This means you are not tied to your import electricity supplier for your export payments. If you find a better tariff with another SEG licensee, you can apply to them. The process typically involves contacting the new licensee, providing details of your installation and meter, and then arranging the transfer of your SEG contract. Always review the terms and conditions of any new contract before committing.

What the published sources do not tell you

While the regulatory framework for the Smart Export Guarantee is clearly defined, certain practical details are not specified in the official documents and vary by supplier or market conditions.

Published statutory regulations do not set specific tariff rates or contract lengths, as these are determined by individual SEG licensees. Therefore, individual suppliers must be contacted directly for current commercial rates.

Detailed application processes for SEG tariffs are also not outlined in the general regulations; these are specific to each licensee. Additionally, while Ofgem states it publishes an annual list of SEG licensees and guidance documents for generators, the content of the current list or these specific guidance documents is not included in the provided sources. This means that while the mechanism for finding licensees is described, the actual list of companies is not directly available here.