Smart Export Guarantee
The smart export guarantee (SEG) is a government-initiated scheme stipulating that licensed electricity suppliers must pay households for any excess renewable electricity exported to the National Grid. It has replaced the Feed-in Tariff (FIT) scheme and came into force on 1 January 2020.
Who is the SEG for?
The SEG is an opportunity for anyone who has installed* one of the following renewable technology types up to a capacity of 5MW, or up to 50kW for Micro-CHP:
- Solar photovoltaic (solar PV)
- Micro combined heat and power (CHP)
- Anaerobic digestion (AD)
*Installations must be located in Great Britain.
How does the SEG work?
Under the SEG arrangements, licensed energy companies are obliged to put in place processes that pay for excess electricity generated by eligible householders and also report to Ofgem on installations. You will have to sign up to a SEG tariff with a licensed energy provider to qualify for the payments otherwise you won't get paid and you will just be giving away free electricity to the National Grid.
Energy companies set the rate they will pay, contract length and other terms. Sometimes wholesale electricity prices can fall below zero, however, the energy company must always pay a tariff above zero. SEG payments are calculated by the energy company using export meter readings.
As energy companies set their own SEG tariff prices, it pays to shop around. In August 2020, SEG tariff payments ranged from 1p/kWh to 5.6p/kWh which, when measured over a year, can add up to quite a difference in the amount of money you'll receive.
For more information please refer to the OFGEM website