Smart Export Guarantee (SEG) Scheme Explained

What is the Smart Export Guarantee (SEG)?

The Smart Export Guarantee (SEG) is a government scheme paying small-scale generators of renewable electricity, i.e. homes and businesses with solar panels and wind turbines, for electricity they export to the National Grid, the UK’s electricity system. The SEG replaced the previous Feed-in-Tariff (FiT) scheme in January 2020 for new applicants.^[3]

The Smart Export Guarantee incentivises homeowners and businesses to invest in low-carbon generating technology by paying them for surplus energy they can’t themselves use, either because it exceeds their needs or is generated at the wrong time. The payment scheme also ensures that the wider public can benefit from the power produced by these small-scale generators, adding capacity to the UK’s renewable infrastructure. As of 2024, around 30% of the total solar capacity in the UK, or 5.2 gigawatts (GW), is installed on homes.^[4]

Between April 2023 and March 2024, more than 283,000 small-scale renewable installations exported energy through the SEG.^[5] Collectively, they sold 238 gigawatt-hours (GWh) of electricity, enough to power around 88,000 UK homes for a year. In total, these generators were paid £30.7 million for their power.^[6]

How does the Smart Export Guarantee work?

The Smart Export Guarantee works much like import gas and electricity tariffs. You choose a participating energy supplier that offers an export tariff with a favourable price per kilowatt-hour of electricity. But instead of you paying that supplier for using their electricity, they are paying you for generating it.

All large energy suppliers, defined as those with at least 150,000 customers, are required by energy regulator Ofgem to offer SEG tariffs.^[7] Others may do so voluntarily.

Suppliers offer SEG tariffs with different rates, so you can shop around for the highest price paid for your electricity, and switch later if you want. In some cases, suppliers require you to also be an import customer of theirs, so you may need to move your home’s energy supply as well.

How much can you earn with the Smart Export Guarantee?

Suppliers offer a range of SEG tariffs, paying between 40p and 1p per kilowatt-hour (kWh) of exported electricity.^[7] According to data from Ofgem’s annual report, renewable generators earned an average of 13p per kilowatt-hour for their electricity during the last financial year.^[5] However, some suppliers pay significantly more, especially if you’re a customer and they’ve installed your solar panels and battery system.

The best SEG tariffs on the market as of March 2025 are:

A typical 3.5kW solar panel array will generate around 3,000 kWh of electricity each year, around half of which can be sold through the SEG. That means you can earn between £15 and £600 from that exported electricity, although around £195 is more typical.^[8]

Who is eligible for the Smart Export Guarantee scheme?

The Smart Export Guarantee scheme is open to homeowners, businesses, and organisations that meet the following requirements:

1. 1

   Have a qualifying small-scale renewable energy system producing electricity

   • Solar photovoltaic (PV): Converting sunlight into electricity; the most common type of small-scale renewable system in the UK

   • Wind turbines: Harnessing the wind to produce electricity

   • Hydroelectricity, also known as hydropower systems: Using flowing water in streams and rivers to generate electricity

   • Anaerobic digestion generators: Burning biogas to generate electricity. Biogas is produced by the decay of organic waste, including dead plants, food wastes and manure. While anaerobic digestion fermenters and generators are rare in homes, they’re common on farms. While anaerobic digestion generation isn’t a zero-carbon technology, it’s seen as low-carbon because the organic matter used absorbed carbon when they were growing.

   • Micro combined heat and power (micro-CHP): Boiler-type systems that produce electricity alongside heat. Although micro-CHP systems can be powered by bio-liquids, such as bio-diesel, they’re most commonly powered by fossil fuels, natural gas, or liquefied petroleum gas (LPG). However, micro-CHP systems are still considered renewable because they are more energy efficient than simply burning fossil fuels for heat.

   Solar PV, wind turbines, hydroelectricity systems, and anaerobic digesters must have capacities of 5 megawatts (MW) or below to be eligible.^[9] Micro-CHP systems are limited to 50 kilowatts (kW) or below.^[10]

2. 2

   Have certification for that system

   The renewable energy system and sometimes its installer must be certified under the Microgeneration Certification Scheme (MCS) or the equivalent.^[11] The exact certification requirements vary depending on the type of system and its size and the requirements of the supplier offering the SEG tariff.

3. 3

   Have a smart export meter installed

   You must have an electricity meter capable of recording electricity not just imported from the grid but sent to the grid.^[11]

   It must be a smart meter, sending automatic readings to your energy supplier every half hour, so they know how much electricity you’re exporting and can pay you accordingly.

4. 4

   Other requirements set by the supplier

   Suppliers may have other eligibility criteria for their best-paying export tariffs. A common one is the requirement that the property has an Energy Performance Certification (EPC) grade of D or better. Additionally, many energy suppliers also require you to be one of their supply customers, meaning you’re buying electricity through them when your generated power isn’t enough.

   To sign up for their best-priced SEG tariff, you often need to have had your solar panels or battery systems installed by the energy supplier as well.

How to apply for the Smart Export Guarantee

You apply for the Smart Export Guarantee through an energy supplier that offers a SEG tariff, also known as an SEG licensee. Select your supplier and tariff carefully, as they pay different rates for electricity.

You can typically find applications for the SEG scheme on energy suppliers' websites. You’ll need to submit details about your renewable energy system, including the type of generation, installation date, and capacity. You’ll also need to prove the system is certified, by submitting your MCS certificate or the equivalent, and that you’re the owner of the system.

The energy supplier should process your application within 28 days. In some cases, they’ll want to inspect your energy system, which will require a home visit.

What if you’re receiving Feed-in-Tariff (FiT) payments?

The Smart Export Guarantee is a successor to the now closed Feed-in Tariff (FiT) scheme, which similarly paid households for the low-carbon electricity they generated.

But there are some important differences between the schemes. While the Smart Export Guarantee only pays generators for the electricity they send back to the grid, the Feed-in-Tariff scheme also pays homeowners for the electricity they generate and use themselves. It offers two tariffs: a generation tariff and a higher export tariff.^[13]

Homeowners locked in the rates for these generation and export tariffs, set by Ofgem, when they joined the Feed-in Tariff scheme, guaranteeing them payments for 10 to 25 years.^[14] The rates offered to new applicants decreased over time but if you signed up early, you’re guaranteed years of generous payments, adjusted for inflation annually. FiT payments continue despite the closure of the scheme to new applicants in April 2019.^[12]

Technically, homeowners receiving FiT payments for their renewable installation can apply for the Smart Export Guarantee. By doing so, they’d have to give up their FiT export payments, while keeping their FiT generation tariff.

However, it’s unlikely anyone would want to do this, as the export rates paid by the FiT scheme typically exceed those offered by energy suppliers through the SEG. Additionally, the FiT scheme assumes that you export half of what your electricity system generates, rather than based payments on exact meter readings, as the SEG does.^[15] So if you’re using more than 50% of your generated electricity, you'll be paid for less energy if you switch to the SEG scheme.

However, if you joined the FiT scheme later, when it was offering lower rates, and believe you can benefit from the rates paid by the best SEG tariffs on the market today, you can make the switch. Just remember that SEG rates are typically locked in only for a maximum of two years (12 months is more common) and could fall in the future, whereas FIT payments are fixed for the remainder of your contract, up to 20 years in the future.

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