Business Energy Glossary
What is the Smart Export Guarantee (SEG)?
The Smart Export Guarantee, almost always shortened to SEG, is the UK government scheme that requires large electricity suppliers to pay small-scale renewable generators for electricity exported to the grid. SEG launched on 1 January 2020, replacing the Feed-in Tariff for new generators. Unlike FiT, SEG provides only an export payment (not a generation payment) at rates set by individual suppliers. SEG applies to installations up to 5 MW including solar PV, wind, hydro, anaerobic digestion, and micro-CHP, provided the installation has a smart meter capable of measuring exports.
SEG is the main UK support mechanism for new small-scale renewable generation. The payment rates are much lower than the Feed-in Tariff it replaced, reflecting falling renewable costs and the changed policy approach. Understanding SEG matters for any business considering on-site solar PV or other generation.
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How SEG works
The Smart Export Guarantee is a scheme in Great Britain that requires larger electricity suppliers to pay for electricity exported from small low-carbon generators, including solar PV up to 5MW. Each supplier sets its own rate, which must stay above zero, and payments are based on metered export from the date you register.
SEG requires licensed suppliers with at least 150,000 domestic customers to offer at least one SEG tariff, and smaller suppliers can take part voluntarily. Each supplier sets its own rates and terms, subject to the requirements:
- The tariff must be positive (greater than zero).
- The supplier must publish the tariff terms.
- The contract is between the customer and their chosen supplier (which can be different from their import supplier).
- Payments are made for every kWh exported, measured by a smart meter or export meter.
Rates and terms vary, so it’s worth comparing export tariffs, including any link to who supplies your imported power.
SEG rates
SEG rates vary substantially by supplier and over time. Typical 2024 ranges:
| Tariff type | Typical SEG rate |
|---|---|
| Standard flat rate | 3 to 8 p/kWh |
| Variable / time-of-use | 2 to 15 p/kWh (higher peak rates) |
| Supplier-specific premium offers | 8 to 15 p/kWh (often for existing customers) |
Some suppliers offer SEG rates linked to wholesale prices, with higher payments during peak periods. These can provide higher average earnings for customers able to time their exports.
Eligibility for SEG
To qualify for SEG, the installation must:
- Be located in Great Britain. Installations of any age qualify, provided they aren’t receiving Feed-in Tariff export payments.
- Be one of the eligible technologies: solar PV, wind, hydro, anaerobic digestion, micro-CHP.
- Have a total installed capacity of no more than 5MW (50kW for micro-CHP).
- For systems up to 50kW, have MCS or equivalent certification for both the installation and the installer.
- Have a smart or export meter, capable of half-hourly readings, that measures exports separately.
An installation can’t receive Feed-in Tariff export payments and SEG at the same time, although one still receiving FIT generation payments can take a SEG tariff for its export instead. They continue under FiT terms.
SEG vs FiT
| Feature | SEG | FiT |
|---|---|---|
| Period | 2020 onwards | 2010-2019 (closed to new) |
| Generation tariff | No | Yes |
| Export tariff | Yes (set by suppliers) | Yes (government-set) |
| Contract length | Set by supplier | 20 to 25 years |
| Typical export rate (2024) | 3 to 15 p/kWh | 5 to 6 p/kWh (index-linked) |
SEG pays only for exported electricity, with no generation payment. For a typical solar PV installation, the absence of a generation tariff means total SEG income is lower than FiT income, even at higher export rates.
Smart meter requirement
SEG requires an export meter that measures exports separately from imports. Three options:
- SMETS2 smart meter. Standard smart meters measure exports automatically. The supplier processes the export data for SEG payment.
- Standalone export meter. An additional meter installed specifically to measure exports. Less common but supported.
- SMETS1 with export functionality. Some older smart meters can measure exports but require validation.
Customers without a suitable meter need to arrange one through their supplier or installer before SEG payments can begin.
SEG for business solar
For commercial solar PV installations:
- Self-consumption typically delivers the largest financial benefit (avoided import cost at full unit rate, often 20 to 30 p/kWh).
- Export to grid via SEG provides additional but smaller revenue (3 to 15 p/kWh).
- Combined with battery storage, on-site consumption can be maximised, reducing exports and increasing self-consumption value.
- Above 5MW a generator needs a commercial route to market rather than SEG.
For most commercial solar installations, the bulk of the financial return comes from displaced imports rather than export earnings. SEG provides incremental value rather than the main revenue stream.
the Smart Export Guarantee (SEG) FAQs
What is the Smart Export Guarantee (SEG)?
A UK government scheme that requires large electricity suppliers to pay small-scale renewable generators for electricity exported to the grid. SEG replaced the Feed-in Tariff in January 2020.
How much does SEG pay?
Rates are set by individual suppliers. Typical 2024 rates: 3 to 8 p/kWh for standard flat rate tariffs, up to 15 p/kWh for variable or time-of-use rates from specific suppliers.
Who is eligible for SEG?
Owners of renewable generation up to 5 MW (solar PV, wind, hydro, anaerobic digestion, micro-CHP) installed in the UK after 1 January 2020 by MCS-certified installers (for systems below 50 kW), with a smart meter or export meter.
How is SEG different from the Feed-in Tariff?
SEG provides only an export payment (no generation tariff), at rates set by individual suppliers rather than government. SEG payments are typically lower than FiT total payments because of the missing generation tariff.
Do I need a smart meter for SEG?
Yes. SEG requires an export meter that measures exports separately from imports. SMETS2 smart meters measure exports automatically. Standalone export meters are also supported.
Can I switch SEG supplier?
Yes. SEG contracts are between the customer and their chosen supplier. The customer can switch SEG supplier separately from the electricity import supplier, choosing the highest rate available.
Can I get SEG if I have FiT?
No. Generators accredited under FiT cannot simultaneously receive SEG export payments. They continue under FiT terms for the remainder of their contract.
Is SEG worth it for business solar?
SEG provides incremental revenue but is rarely the main financial driver for commercial solar PV. The bulk of return typically comes from displaced imports (avoided grid electricity costs). SEG adds to this rather than being the primary revenue stream.