If you have a renewable energy system, such as solar panels, you can earn money by selling your surplus electricity back to the National Grid. This guide explains how the Smart Export Guarantee (SEG) scheme works, how much you could earn per kilowatt-hour (kWh), and how to choose the best tariff to maximise your returns.
If you're generating your own power, you'll want to make the most of it. Fuse Energy offers a competitive SEG tariff, paying 13p per kWh for the electricity you export to the grid. Click here to find out more about our export tariff and how to switch.
The SEG is a UK government-backed initiative designed to ensure small-scale, low-carbon electricity generators are paid for the electricity they export to the National Grid. It encourages more homes to generate and use renewable energy.
What is the SEG?
The SEG requires licensed electricity suppliers to offer tariffs and pay eligible generators for the electricity they export. This means when your solar panels generate more electricity than your home consumes, the surplus is fed into the National Grid, and your chosen SEG licensee pays you for every kWh exported. The SEG scheme is regulated by Ofgem.
Key differences between SEG and the Feed-in Tariff (FiT)
The SEG replaced the Feed-in Tariff (FiT) scheme for new installations from 1 January 2020. The FiT scheme closed to new applicants in March 2019. Unlike the FiT, which offered both generation and export payments at a fixed, government-mandated rate, the SEG only pays for exported electricity. Suppliers set their own SEG rates, which must be above zero, leading to a competitive market where rates vary significantly. Existing FiT recipients continue to receive payments under their original agreements, but new installations are only eligible for SEG.
To participate in the SEG scheme and earn from your exported electricity, your renewable energy system and metering must meet specific criteria.
System size and certification (MCS)
To be eligible for the SEG, your renewable energy system must have a total installed capacity of up to 5 megawatts (MW) for most technologies. For micro-combined heat and power (micro-CHP) systems, the capacity limit is 50 kilowatts (kW). Crucially, your installation and installer must be certified under the Microgeneration Certification Scheme (MCS) or an equivalent accredited scheme. This certification is a primary document needed for your SEG application.
Meter requirements: smart meters and export readings
You must have a meter capable of providing half-hourly export readings. This is typically a smart meter, which your energy supplier can often install for free. Your energy supplier arranges and installs the meter, so you do not choose or buy your own smart meter model. The smart meter allows your supplier to accurately measure the electricity you export, ensuring you are paid for what you send to the grid. You can learn more about how to get a smart meter here.
Distribution network operator (DNO) notification
When connecting microgeneration equipment to the grid, you or your installer must notify your Distribution Network Operator (DNO) under G98 regulations within 28 days of connection. This notification is crucial for safety, network management, and to ensure your system is officially recorded with the network, which aids in processing SEG payments. Understanding your DNO's role is important for any homeowner with a renewable energy system; you can find out more about what a DNO is in our dedicated guide.
The amount you can earn from exporting electricity varies significantly, making it essential to understand the factors at play and compare available tariffs.
Factors influencing SEG rates
SEG tariffs are set by individual suppliers, meaning there is no single fixed rate. Rates can vary based on several factors:
- Supplier conditions: Many of the highest rates are offered to existing electricity supply customers of that provider, or require you to have had your solar panels or battery installed by them.
- Time-of-use vs fixed rates: Some tariffs offer variable rates that change throughout the day, often paying more during peak demand times (e.g., 4pm to 7pm). Fixed rates pay the same amount per kWh regardless of when you export.
- Battery storage: Having a battery can significantly impact your earnings, as it allows you to store surplus generation and export it during higher-paying peak periods.
- Market competition: Suppliers compete to offer attractive terms, and rates can change over time.
Comparison of SEG tariffs in the UK
SEG tariffs in the UK typically offer rates ranging from 1p to over 20p per kWh for exported electricity. Some of the highest rates are often tied to specific supplier conditions or smart meter usage. More widely available tariffs for non-customers might offer lower rates. Fuse Energy pays customers 13p for every kWh of electricity they export to the grid.
Major suppliers are obligated to offer at least one SEG tariff. Rates from these suppliers can vary, with some offering fixed rates and others providing variable or time-of-use options.
SEG rates and battery storage: optimising your earnings
Battery storage plays a crucial role in maximising your SEG earnings. Without a battery, your surplus solar generation is exported immediately, often at lower daytime rates. A battery allows you to store this excess energy and discharge it during periods when export rates are higher, such as evening peaks.
