Smart Export Guarantee: earn from your solar panels

The Smart Export Guarantee (SEG) allows UK homeowners with solar panels to earn money for the surplus electricity they feed back into the National Grid. It is a significant opportunity to turn your self-generated energy into a tangible financial advantage, shifting the balance of power into your hands. This guide will walk you through how the SEG works, who is eligible, and how to choose the best tariff to maximise your solar export payments.

What is the Smart Export Guarantee (SEG)?

The SEG is a government-backed initiative that mandates licensed electricity suppliers to pay small-scale low-carbon generators for the electricity they export to the National Grid. Introduced in January 2020, the SEG replaced the previous Feed-in Tariff (FiT) scheme, encouraging more homes to generate and use renewable energy.

Under the SEG, if your solar panels generate more electricity than your home uses, you can get paid for that excess energy when it is sent back to the grid. All electricity suppliers with at least 150,000 domestic customers are legally required to offer at least one SEG tariff, and these tariffs must offer a rate greater than zero for each unit (kWh) of electricity exported.

SEG vs Feed-in Tariff (FiT): the key differences

The SEG scheme replaced the Feed-in Tariff (FiT) for new installations from 1 January 2020, with the FiT scheme closing to new applicants in March 2019. While both schemes aimed to incentivise renewable energy generation, there are key distinctions:

• Payment basis: The FiT scheme paid for both the electricity generated and a separate export tariff for surplus energy sent to the grid. In contrast, the SEG only pays for the electricity you export.
• Rate setting: FiT rates were set by the government and were generally higher and inflation-linked. SEG rates, however, are determined by individual electricity suppliers, leading to significant variations across the market.
• Eligibility for existing FiT customers: If you secured a FiT before March 2019, you will continue to receive payments under that scheme for its full 20-25 year term. You cannot be on both a FiT and an SEG at the same time for the same installation.

How the SEG scheme works for homeowners

Participating in the SEG scheme is straightforward once you meet the eligibility criteria. You will need to apply directly to a SEG licensee - an electricity supplier offering a SEG tariff. This supplier does not have to be the same company that provides your import electricity.

Once your application is approved, your smart meter will measure the electricity you export to the grid, and your chosen SEG licensee will pay you based on their agreed tariff rate. Payments are typically made quarterly, but this can vary by supplier.

Are you eligible for SEG payments?

To benefit from SEG payments, your solar panel system and metering setup must meet specific requirements. These criteria ensure that your installation is safe, efficient, and accurately measurable.

System requirements and capacity limits

Your renewable electricity generating system must meet certain conditions to qualify for the SEG:

• Technology type: The SEG supports various low-carbon technologies, including solar photovoltaic (solar PV), wind, micro combined heat and power (micro-CHP), hydro, and anaerobic digestion.
• Location: Your installation must be located in Great Britain (England, Scotland, or Wales) .
• Capacity: For most technologies, your generation capacity must not exceed 5MW. For micro-CHP systems, the limit is 50kW. Most domestic solar panel installations will comfortably fall within these limits.
• Certification: Your installation and installer must be certified under the Microgeneration Certification Scheme (MCS) or an equivalent scheme. This ensures your system meets safety and performance standards.

Metering requirements: why a smart meter is essential

A smart meter is generally a prerequisite for receiving SEG payments. It plays a crucial role in accurately measuring your exported electricity:

• Half-hourly readings: You need a smart meter capable of providing half-hourly export readings. This data allows suppliers to precisely calculate your export payments.
• Free installation: If you do not already have a smart meter, your electricity supplier can install one for you, often free of charge. You can learn more about this process, including how to request a smart meter installation, from your supplier.
• Export MPAN: You will also need an export MPAN (Meter Point Administration Number), a 13-digit code that identifies your export supply point.

Choosing the best SEG tariff for your home

SEG tariff rates vary significantly between electricity suppliers, making it crucial to compare options to maximise your earnings. Some tariffs offer rates as low as 1p/kWh, while others can exceed 20p/kWh, particularly with specific conditions.

Comparing SEG rates from different suppliers

Shopping around is key to finding the best SEG deal. You are not tied to your import electricity supplier for your SEG tariff; you can choose any SEG licensee.

• Wide range of rates: SEG rates can range from around 3p/kWh to as high as 25p/kWh, depending on the supplier and tariff conditions. For instance, some of the highest rates might require specific technology like a Tesla Powerwall battery or installation by a particular company.
• Supplier-specific offers: Many suppliers offer better rates to their own import customers or those who bundle their import and export tariffs. However, standalone export tariffs are also available.
• Regular review: Tariffs can change over time, so it is wise to regularly check and compare offers to ensure you remain on a competitive tariff.

Understanding variable vs fixed tariffs

SEG tariffs typically come in two main types:

• Fixed SEG tariffs: These offer a set price per kWh for the duration of the contract, usually around 12 months. They provide budget certainty, as your payment rate will not change.
• Variable SEG tariffs: The rates for these tariffs can fluctuate with market prices. While they offer the potential for higher earnings during periods of high demand, they also carry more risk and are less predictable.

Factors beyond rate: payment terms and customer service

While the per-kWh rate is a primary consideration, other factors can influence your overall experience and earnings:

• Payment frequency: Some suppliers pay quarterly, while others might pay monthly or yearly.
• Contract length: The duration of the SEG contract can vary between suppliers.
• Customer support: Navigating the complexities of energy schemes can be challenging. Access to 24/7 human customer support can be invaluable for understanding your payments and resolving any issues.

Maximising your solar export earnings

Beyond choosing the right tariff, there are strategies you can employ to get the most out of your solar panels and the SEG scheme.

Optimising your energy usage and export

The goal is to export as much surplus electricity as possible while still meeting your household's needs.

• Self-consumption vs export: It often makes financial sense to use the electricity your panels generate directly in your home, as the cost of buying energy from the grid is typically higher than SEG tariff rates. However, any excess energy that you will not use is best exported to earn payments.
• Time-shifting usage: If you have a variable SEG tariff, consider running high-energy appliances (like washing machines or dishwashers) during periods when your panels are generating the most electricity and export rates are highest. Understanding how to read your smart meter can help you track your usage patterns.

Integrating with battery storage for greater returns

Battery storage systems can significantly enhance your SEG earnings and overall energy independence.

• Storing surplus energy: Instead of immediately exporting surplus electricity, a battery can store it for later use or export. This allows you to use your own generated power when your panels are not producing (e.g., at night) or to export it when SEG rates are more favourable.
• Optimised export: Some advanced tariffs and battery systems can automatically manage when to charge, discharge, or export, based on real-time energy prices, helping you maximise returns.

Navigating the SEG: support and next steps

The SEG is a power play, empowering you to gain more from your energy. While the process involves a few steps, the financial benefits make it a worthwhile endeavour.

Applying for an SEG tariff

1. Check eligibility: Ensure your solar panel system and meter meet all the SEG eligibility criteria, including MCS certification and a smart meter capable of half-hourly readings.
2. Compare tariffs: Research and compare the SEG tariffs offered by different licensed electricity suppliers. Look beyond just the headline rate and consider payment terms and any specific conditions.
3. Apply directly: Once you have chosen a supplier, apply directly to them for your preferred SEG tariff. Each supplier will have their own application process.

What to expect after your application

After submitting your application, the supplier will process it and, if approved, set up your SEG payments. You will then start earning for the electricity you export. Remember to monitor your exported electricity and payments to ensure everything is working as expected and you are maximising your earnings.

Making the most of your solar panels and the SEG can feel complex, but it does not have to be. Fuse Energy is committed to making energy simple and transparent, helping you understand your options and get the most from your home generation. Our 24/7 human customer support is always available to assist you with any questions about your energy. Ready to switch to an energy supplier that puts you first?