The Smart Export Guarantee (SEG) allows you to sell excess energy from your solar system back to the National Grid. It’s an incentive of sorts, from the government on top of the added benefits of having solar in the home!
Understanding the Smart Export Guarantee (SEG)
The UK government has long been committed to reducing carbon emissions and promoting sustainable energy sources. One of the key initiatives supporting this vision is the Smart Export Guarantee (SEG), which plays a crucial role for homeowners and businesses with solar panels. In short, this allows you to sell any excess energy that you generate from your systems back to the National Grid.
If you’re considering installing solar panels or already have them, understanding how the SEG works is essential to maximizing the financial benefits of your solar system!
In this blog post, we’ll break down the SEG, how it works, and how you can use this scheme to earn money from your solar energy generation.
What Is the Smart Export Guarantee (SEG)?
The Smart Export Guarantee (SEG) is a government-backed scheme introduced in January 2020, designed to support the transition to renewable energy in the UK. It allows homeowners, businesses, and other solar panel owners to be paid for the excess electricity they generate and export back to the National Grid. In short, if your solar panels generate more electricity than you use, the SEG ensures you get paid for that surplus energy.
Why do they do this? We hear you ask. Its cheap energy for them and rewarding for you. Every home with solar panels can contribute towards the nations power needs and it makes the whole country that little bit greener. It’s a win-win for both parties, you get paid for energy you aren’t using and they get cheaper, greener energy to use!
The SEG is the successor to the Feed-in Tariff (FiT) scheme, which closed to new applicants in March 2019. The FiT paid both for the energy you produced and for the energy you exported, but under the SEG, only exported electricity is compensated.
How Does the SEG Work?
Step 1 – Solar Panel Installation
To participate in the SEG, you need to have a solar panel system installed. The system must meet certain standards:
Certification: Your system should be certified to meet MCS (Microgeneration Certification Scheme) standards or equivalent. This ensures that the installation is safe, reliable, and efficient.
Export Metering: A smart export meter must be installed to measure how much electricity you’re exporting back to the grid. This is typically installed at no additional cost by your energy supplier.
Step 2. Generating Excess Solar Energy
Once your solar panels are up and running, they begin to generate electricity from sunlight. The energy you generate is either used to power your home or business, or it may be surplus that your building doesn’t need.
– On sunny days, when your solar panels produce more electricity than you can consume, the excess power is fed back into the National Grid.
– If your system is not generating enough energy to meet your needs (such as on cloudy days or at night), you can still draw power from the grid as usual.
Step 3. Getting Paid for Exported Energy
The key benefit of the SEG is that it ensures you’re compensated for the excess energy you export. You’ll receive a payment from your energy supplier for the electricity you send back to the grid. Here’s how it works:
Agreement with an Energy Supplier: You must sign up with an energy supplier that offers an SEG tariff. Not all suppliers are part of the scheme, so it’s important to shop around and compare rates.
Payment Rates: The rates paid for exported energy vary between suppliers and can be fixed or variable. Rates range from around 3p to 10p per kWh (kilowatt-hour), but the rate you receive will depend on your chosen supplier. Some suppliers offer more competitive rates than others, so it’s worth comparing options.
Payment Frequency: Depending on the supplier, you may receive payment monthly, quarterly, or annually. Some suppliers may offer payments directly to your bank account or as credits against your energy bills.
Step 4. Smart Export Meters
To measure the amount of energy you’re exporting, a smart export meter (or a similar metering device) will be installed by your supplier. The meter records how much energy flows from your home to the grid. This allows suppliers to calculate the amount of export payments you are entitled to.
Export-Only Metering: Unlike traditional meters, the export meter will only measure the energy you send to the grid. This helps to ensure accurate payment for the electricity you export.
Time-of-Use Meters: Some suppliers may offer time-of-use tariffs, meaning the price you get for exported energy could vary depending on the time of day or the level of demand on the grid.
Step 5. Eligibility and Tariff Flexibility
The SEG is available to both domestic and business solar panel owners. However, there are a few eligibility requirements to bear in mind:
Eligible Technologies: While the SEG is mainly for solar panels, other renewable energy technologies, like wind turbines and hydro systems, can also participate, provided they meet the required standards.
No Minimum or Maximum Limits: Unlike the FiT, there is no upper limit to the size of the system that can receive SEG payments. However, smaller systems (usually up to 5 MW) are generally more common for domestic users.
The SEG payments are usually based on the amount of electricity you export to the grid, but some suppliers offer **higher rates** for certain times of the day when demand for electricity is high (such as in the evening), or they may offer bonuses for customers with more energy-efficient systems.
What are the Benefits of the SEG for Solar Panel Owners
Earn Money for Surplus Energy: By participating in the SEG, you’re monetizing the energy that would otherwise go unused. Even though the SEG payments may not cover the full cost of installing a solar system, they provide an ongoing stream of revenue.
Encourages Solar Investment: The SEG incentivizes the installation of solar panels by making it easier for homeowners and businesses to recover some of the costs over time.
Supports a Greener Future: By exporting surplus energy to the grid, you’re contributing to the overall use of renewable energy in the UK, helping to lower carbon emissions and reliance on fossil fuels.
Energy Independence: Over time, the combination of energy savings from your solar system and income from the SEG can significantly reduce your reliance on traditional energy suppliers and rising electricity prices.
Things to Keep in Mind
Rate Variability: The SEG payment rates can fluctuate depending on the energy market and your supplier’s terms. Always check the rates offered by different suppliers before signing up.
Export-Only Payments: Unlike the FiT scheme, the SEG only pays for the electricity you export, not the electricity you consume. Therefore, the payments won’t offset your entire energy bill.
Contract Length and Terms: The SEG payments are typically offered on 1-3 year contracts. Be sure to review the terms and conditions of your contract to ensure you understand the payment structure and duration.
Monitoring Your System: It’s important to keep an eye on your solar panel performance and make sure your export meter is functioning correctly. You may want to periodically check your energy generation to make sure you’re getting paid for all the energy you’re exporting.Whether You Are Eligible: Only certain criteria can qualify for the SEG so be sure to ask if you can. Typically, your installation must be 5MW or less, be able to install a meter that can provide half-hourly readings (most of the time a smart meter ticks this box) and the installer must be MCS-certified. Something at Honest Quotes we ensure.
The Smart Export Guarantee is a great opportunity for solar panel owners to make the most of their renewable energy systems by getting paid for the surplus electricity they generate and export to the grid. While the payments might not cover the full cost of your solar panel installation, they can help to reduce your long-term energy costs and contribute to the UK’s green energy transition.
If you’re considering installing solar panels or already have them, signing up for the SEG is an easy way to benefit from your renewable energy system and support a more sustainable future. Just make sure you shop around for the best SEG tariff and understand the terms of your agreement with your chosen energy supplier.
To find out if solar is right for you, just fill in a quick form by clicking here and we’ll get you a FREE QUOTE to see how much you can save and start to see if you can utilise the Smart Export Guarantee to help reduce your energy bills.
