Smart Export Guarantee Explained: Selling Solar Power in Great Britain

Key Takeaways

• The Smart Export Guarantee (SEG) is a government-backed initiative launched on 1 January 2020, enabling small-scale generators to sell electricity to the grid.
• Electricity suppliers, known as SEG Licensees, determine their own export rates, contract lengths, and terms, with the only requirement being that rates must be above zero.
• The SEG scheme applies specifically to installations located in Great Britain, excluding Northern Ireland.
• To participate, your installation needs to be registered with your local Distribution Network Operator (DNO), and payments are based on actual export meter readings.

What is the Smart Export Guarantee (SEG)?

The Smart Export Guarantee (SEG) is a government-backed initiative that allows small-scale electricity generators to receive payments for the electricity they export to the National Grid. Launched on 1 January 2020, the SEG replaced the previous Feed-in Tariff (FiT) scheme. Its primary purpose is to enable small-scale generators to receive payments from electricity suppliers for electricity which they export back to the National Grid, provided certain criteria are met.

The SEG is administered by Ofgem, the Office of Gas and Electricity Markets. It places an obligation on larger electricity suppliers, referred to as SEG Licensees, to offer a SEG tariff to eligible generators. This means that if you generate your own electricity, for example, with solar panels, and you export any surplus back to the grid, a licensed electricity supplier must offer you a payment for that exported power. Installations must be located in Great Britain to be eligible for the scheme.

How the Smart Export Guarantee Works

When your home or business generates more electricity than it consumes, the surplus power is automatically exported back to the National Grid. The Smart Export Guarantee provides a framework for you to be paid for this exported electricity.

The core mechanism is that SEG licensees must offer a SEG tariff to all eligible generators. These payments are based upon actual meter readings, ensuring you are paid for the exact amount of electricity you export. A key aspect of the SEG is that SEG Licensees determine the rate, contract length and other terms which SEG Generators will receive. This means there is no single, government-set export rate. Instead, different electricity suppliers will offer varying tariffs. The only universal rule is that SEG tariff rates must always be above zero.

This approach encourages competition among suppliers, as they can offer different rates and terms to attract generators. 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 flexibility allows you to shop around for the best deal.

Who Can Participate in the SEG?

The Smart Export Guarantee is designed for small-scale generators using specific low-carbon technologies. To be eligible, your installation must meet certain criteria regarding its location, technology type, and capacity.

First, installations must be located in Great Britain. This means the scheme does not cover Northern Ireland, which has its own energy arrangements.

The eligible technologies include:

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

Each of these technologies has a maximum capacity limit. For most installations, the total installed capacity (TIC) must be no more than 5MW. However, for micro-CHP, there is a specific limit of no more than 50kW. Anaerobic digestion (AD) installations also have additional requirements; they will need to meet the sustainability criteria and reporting requirements.

Before you can receive SEG payments, your solar panel system needs to be registered with your local Distribution Network Operator (DNO). This registration ensures that the local electricity network is aware of your generation capacity and that your system meets safety and operational standards. While you won’t generally require planning permission to install solar panels, you should still consult your local planning office to confirm any specific local requirements.

Finding the Best SEG Tariff

Since electricity suppliers determine their own SEG rates and terms, finding the best tariff involves some research. Generators thinking of applying for a SEG tariff should shop around to see which tariff is best for their individual circumstances.

Here is what you can check yourself:

1. Supplier Websites: Visit the websites of various electricity suppliers. Many will have dedicated pages outlining their SEG tariffs, including their rates, contract lengths, and any specific conditions.
2. Ofgem's Licensee List: Ofgem publishes a list of SEG Licensees. This list can help you identify all the suppliers obligated to offer a SEG tariff, ensuring you don't miss any potential options.
3. Compare Terms: Beyond the pence per kWh rate, consider other terms such as contract length, payment frequency, and whether the tariff is fixed or variable. Some suppliers might offer better rates if you are also their electricity import customer, but remember, your SEG licensee does not need to be the same company as your current energy supplier.

What you cannot check yourself, or what is not applicable:

• You cannot invent or assume a specific pence per kWh export rate. These rates are set by individual suppliers and can change.
• You cannot directly influence the terms or rates offered by suppliers; your choice is to select the most suitable existing tariff.
• You cannot bypass the requirement for DNO registration or the need for an export meter, as these are fundamental to the scheme.

For more detailed guidance on comparing tariffs and making an informed choice, you can refer to our guide on /uk/guides/money/how-to-choose-a-seg-tariff-uk. If you are considering installing solar panels, understanding the costs and potential savings, including VAT implications, can be found in our article on /uk/guides/money/zero-vat-solar-panels-uk-what-qualifies. Information on broader financial support for solar installations is available in /uk/guides/money/eco4-and-energy-grants-for-solar-uk.

What the Published Sources Do Not Tell You

While the Smart Export Guarantee framework is clear, certain specifics are not centrally published or are subject to individual supplier policies.

Crucially, no Ofgem page or official source publishes a specific SEG rate in pence per kWh. This is because SEG Licensees determine the rate, contract length and other terms. Therefore, you will not find a universal or recommended export rate from official government or regulatory bodies. To find current rates, you must consult the individual electricity suppliers' tariff pages.

The corpus of information also does not contain detailed application processes for specific SEG licensees. While it states that you can apply to any licensee, the exact steps, required documentation, and timelines will vary from one supplier to another. Similarly, while DNO registration is a requirement, this corpus does not provide detailed G98/G99 DNO connection requirements or processes, which are technical standards for connecting generation to the grid.

Finally, specific SEG tariffs offered by individual electricity suppliers, including their exact rates, contract lengths, or other terms, are not included in this general overview. These details are dynamic and competitive, requiring direct engagement with suppliers.