The Smart Export Guarantee (SEG) is a government initiative designed to incentivise the adoption of renewable energy in residential properties. Households can earn money for surplus energy they generate and export back to the National Grid. For those with solar panel systems, the SEG offers a valuable opportunity to offset the costs of installation and even generate a return on investment over time.

In this guide, we’ll explore what the SEG is, how it works, and how to benefit from it.

What is the Smart Export Guarantee?

The Smart Export Guarantee was introduced in January 2020 to replace the Feed-in Tariff (FiT) scheme. The SEG mandates that licensed electricity suppliers in the UK, such as EDF and Octopus Energy, offer payment for surplus electricity generated by small-scale, renewable energy sources like solar panels. For homeowners that generate more energy than they use, you can ‘sell’ your energy back to the grid for general use. 

The SEG is part of the UK government’s commitment to achieving Net Zero by 2050, promoting renewable energy adoption as a means to reduce the nation’s carbon footprint. By compensating individuals for their renewable contributions, the SEG helps make sustainable energy more financially viable for households.

How does SEG work?

Here’s a simple breakdown of how the SEG operates:

1. Export surplus energy to the grid: When your system produces more electricity than you need, the surplus is exported to the national grid. Rather than this energy going unused, the SEG allows you to benefit financially from it.
2. Receive Payment from Your Energy Supplier: Under the SEG, energy suppliers are required to offer tariffs for exported electricity. This means you’ll receive a payment per kilowatt-hour (kWh) for the electricity you export. Payments can vary between suppliers, so it’s a good idea to compare offers to maximise your earnings.

To qualify, your installation must be certified under the Microgeneration Certification Scheme (MCS), and you’ll need a smart meter capable of measuring exported electricity.

Is it worth investing in solar?

Alongside the financial incentives of SEG, there has never been a better time to start harnessing the power of the sun:

1. Financial returns on solar adoption: Earning money from the surplus energy you generate can help cover installation costs over time. While each property and project is individual, SEG can reduce the time to breakeven from 10-15 years, to 7-10, depending on energy production and supplier rates. 
2. Store solar to use another time: Instead of ‘selling’ your surplus power back to the grid, investing in battery storage would allow you to save the energy to use later, such as at night. 
3. Energy independence: Generating and exporting your own power reduces dependence on traditional energy suppliers. As energy costs continue to rise, the ability to generate income from renewable energy provides an extra layer of energy security.
4. Supporting sustainability goals: The SEG helps households play an active role in the UK’s Net Zero by 2050 target. By exporting excess energy, you can directly contribute to a cleaner, more sustainable national grid.

Is now the right time to invest in solar?

As energy prices rise and the UK pushes towards its Net Zero target, the SEG makes investing in solar panels more attractive than ever. Not only do you save on energy bills, but the payments for surplus electricity give you a way to recoup installation costs over time. And as the demand for renewable energy grows, future tariffs for exported energy could increase, potentially making solar investments even more profitable.

Solar energy also acts as a hedge against rising electricity prices, giving you greater control over energy costs and long-term savings.

How to get started

To take advantage of the scheme, you must ensure your solar installer is MCS-certified. This is a certification we are proud to hold, and by visiting their website, you’ll be able to find a list of suppliers in your area. Next, find an energy supplier offering a favourable SEG tariff, as rates can vary. Most major suppliers provide SEG tariffs, but it’s important to compare offers for the best deal for your needs.

For more detailed information on the scheme, we recommend you visit the UK Government website to explore eligibility criteria and additional guidelines.

Next steps

The Smart Export Guarantee offers a practical incentive for homeowners interested in solar energy, providing a means to offset installation costs and contribute to a sustainable future. By exporting excess power, you can earn income, reduce your payback period, and enjoy the security of energy independence. 

To find out how installing solar could help your home, please contact our team >