Do you generate electricity from renewable sources at home? We have something interesting for you!
The Smart Export Guarantee (SEG) is a government-backed initiative launched on 1 January 2020. This initiative ensures that small-scale generators in England, Wales, or Scotland get paid for the electricity they export to the National Grid.
The support mechanism was designed to help the UK reach net-zero carbon emissions by 2050. It essentially replaces the Feed-in Tariff (FiT) scheme.
This article will walk you through everything you need to know about the SEG scheme, from eligibility to Smart Export Guarantee tariff rate and much more.
- 1 Smart Export Guarantee (SEG) Explained
- 2 Types Of SEG Tariffs
- 3 Smart Export Guarantee Tariff Comparison 2021
- 4 Who Is Eligible To Receive SEG Payments?
- 5 Are SEG And Feed-in Tariff The Same?
- 6 Should You Change To The SEG If You Already Have The FiT?
- 7 Closing Thoughts
Smart Export Guarantee (SEG) Explained
The SEG presents export tariffs for several small-scale energy-generating technologies that do not produce high carbon emissions. It was designed as a means to persuade homeowners in the UK to switch to renewable electricity.
The SEG covers various renewable energy generation techniques, such as solar energy, wind power, hydropower, micro combined heat and power or micro CHP, and anaerobic digestion. If you generate electricity at home by any of these modes, you also need a smart meter.
A smart meter is an export meter that takes measurements every 30 minutes and sends the half-hourly readings to your SEG licensee. You then receive some tariffs based on your contribution to the National Grid.
Let us discuss the various renewable energy generation technologies that the SEG covers.
Solar Photovoltaic Systems
Solar panel systems are undoubtedly one of the most popular methods for generating low-carbon energy. Regardless of the kind of solar PV system you own, you qualify for the SEG tariff as long as the system creates less than 5MW of electricity.
However, you need to ensure that your solar installation has the MCS certificate (Microgeneration Certification Scheme). For systems smaller than 50 kW, you also need to prove that the installer is MCS certified. Since the most common sizes for domestic solar panels are 4kW, 5kW, or 6kW, this rule applies to all of them.
When you use solar battery storage, the excess energy produced gets stored in the battery. The SEG is an export tariff, which means you will only receive money for the energy you export to the grid. Therefore, storing energy in solar batteries will not be of much use.
It is only in certain instances that the SEG scheme covers solar storage. You need to consult your licensee to understand the situation better.
In the third quarter of 2019, wind energy accounted for 20% of electricity generation in the UK. While it is commonly generated in large wind farms, there are some viable home options as well.
To qualify for SEG payments, you need to be mindful of the following conditions:
- For systems producing less than 50 kW, you require an installer and installation certification.
- For systems producing anywhere between 50kW to 5MW, you require proof of the installation certification.
Micro Combined Heat And Power (CHP)
Micro CHP is a system that generates electricity and heat simultaneously. While it is not always a carbon-free energy source, it reduces emissions since it accomplishes two tasks together.
The use of CHP is becoming quite common since it helps businesses reduce energy costs along with environmental impact.
Micro CHP systems qualify for SEG tariffs if their capacity is lower than or equal to 50kQ, and you can provide an installation and installer certificate.
Hydropower refers to generating electricity from water. It is not a very common renewable electricity source and is mostly generated in large-scale systems. However, it can be used on the domestic level too.
The UK has been a pioneer in the hydroelectricity industry globally. This technology is especially common in the Scotland and Wales region.
If you want to receive SEG payments for hydropower, you’ll have to present an installation certificate. Unlike with other renewable energy sources, you will not have to present any proof about your installer.
Anaerobic digestion is the process by which organic material is broken down to produce biogas. This biogas is not free of emissions, but it is a renewable energy source.
Digesters employ microorganisms such as bacteria to disintegrate matter like wastewater, manure, and food waste. When the organisms and matter interact in a no-oxygen environment, they create natural gas, mostly methane.
While this process might not be very common in households, it is perfect for farmers.
The SEG scheme treats hydropower much like anaerobic digestion. Regardless of the energy you generate, you only need to present an installation certificate and not an installer certificate. However, you will also have to provide documents to prove that your system complies with SEG guidelines.
Types Of SEG Tariffs
SEG payments can broadly be divided into two tariffs: fixed and flexible.
These SEGs have a fixed amount that they pay per kWh of electricity sent to the grid. The amount does not change, irrespective of the time the electricity is sent back to the grid.
Today, most SEG licensees follow this system.
These SEGs pay you different amounts depending on how useful the electricity is to the system at a given point in time.
To put it simply, you would receive more pay for energy exported to the grid at a time of high demand and receive comparatively lower pay for sending energy back to the grid during off-peak hours.
Often, companies offer a multi-rate system, wherein different rates are fixed for the energy you export to the grid at different times, like weekdays and weekends or days and nights.
Smart Export Guarantee Tariff Comparison 2021
According to the Solar Trade Association, a price of 5p to 6p would be a fair offering to households. However, not all energy suppliers are on the same page.
Here’s a quick rundown of the offers by different energy companies.
Social Energy SEG Tariff
Social Energy provides the best value export tariff for exporters and is a certified provider. Its “Smarter Export” tariff offers customers 6p per kWh, and you can expect fluctuations based on market conditions.
According to their website, you require a solar battery and hub from Social Energy to be eligible for the SEG tariff. However, you need to be in supply with Social Energy for electricity.
A major benefit of Social Energy is that they use advanced AI technology to help maximize earnings from electricity exported back to the grid. Moreover, they offer competitive prices despite market fluctuations.
All you need is a smart meter that will export half-hourly readings.
Octopus Energy SEG Tariff
You might have heard of the tariff name “Outgoing Octopus” from Octopus Energy. The export tariff offers two options for customers – Fixed and Agile.
Under the Fixed tariff, you are guaranteed 5.5p per kWh meters export, whereas the Agile tariff meets half-hourly prices with day-ahead wholesale rates.
Octopus Energy has such a large customer base that they can even sell your energy to a neighbour, making them probably the first peer-to-peer energy trader.
If you wish to receive the SEG tariffs, your solar panel system needs to be certified. Additionally, you need a smart meter that exports meter readings every half hour.
E.ON SEG Tariff
E.ON has a “Fix & Export Exclusive v1” tariff plan that offers customers 5.5p per kWh. Once you apply for this tariff, you will receive your Export MPAN (meter point administration number), which helps in identifying your export meter and calculates how much energy you export.
The tariff rate is fixed in this case, and the payment is also made in 12-month fixed cycles.
Along with having a certified solar panel system and a smart meter that sends the half-hourly meter reading, customers also need to have a generation unit with a capacity stretching to 5MW. Customers will receive their payments according to the 12-month fixed cycle.
Bulb Energy SEG Tariff
Bulb Energy provides a competitive tariff, known as “Export Payments”, that offers 5.38p per kWh for metered export.
Unlike other cases, where meter readings are automatically sent to the energy supplier, Bulb Energy reaches out quarterly to inquire about your on-site meter reading.
You do not even have to be a Bulb member to sign up for their SEG tariff. Moreover, if you wish to move to Bulb for your energy supply, they’ll cover your exit fee for the previous supplier.
As long as you have a certified solar panels system with a capacity of up to 5MW and a smart meter, you can receive the tariff.
OVO Energy SEG Tariff
OVO Energy has a plan called the “OVO SEG Tariff” that offers customers 4p per kWh for exporting renewable electricity. In case you do not have an Export MPAN, you should acquire it if you want to apply for the tariff.
The contract comes into force as soon as you have the MPAN. According to the agreement, manual-quarterly readings will be sent to the supplier from the export meter. You can, however, choose to provide automated remote readings.
A smart meter will have to be installed to send the half-hourly meter reading, and your certified solar panel system should have a capacity of 5MW to qualify for the tariff.
Scottish Power SEG Tariff
The “Smart Export Variable Tariff” is a rather popular tariff name from Scottish Power. It offers customers 4p per kWh for energy exported to the grid. The name clearly lets us know that the tariff rate is variable and may fluctuate from time to time.
If you want to apply for these SEG tariffs, you need an MPAN and a certified solar panel system. Moreover, the solar energy generation unit should have a capacity of up to 5MW.
Under this agreement, you can choose to opt only for the SEG export tariff and pick an alternative energy supplier. Moreover, you receive your payment every six months.
British Gas SEG Tariff
The “Export and Earn Flex” from British Gas offers customers 1.5p per kWh for every unit of renewable electricity they export to the grid.
As we can see from the tariff name, the rate is variable, meaning there is no fixed exit fee or end date. As soon as customers accept the plan, they are expected to show British Gas their initial meter reading. Consequently, meter readings will be taken every six months, either via email or phone.
The energy supplier will make export payments once every six months. If you want to apply for this tariff, you need to have an export meter that records half-hourly readings and a certified solar panel system. Additionally, the solar panels’ generation unit should have a maximum capacity of 5MW.
Utility Warehouse SEG Tariff
Utility Warehouse provides customers SEG tariffs at the rate of 2p per kWh for every unit of electricity exported. As soon as you get accepted to the plan, you will have to present your first meter reading to the energy supplier.
Consequently, readings will be taken on a quarterly basis. The tariff is based on a variable rate, so you can expect fluctuation from time to time. Utility Warehouse will notify customers about each payment.
If you wish to apply for the tariff, you need to have an export meter that records meter readings every 30 minutes and a certified solar PV system. Additionally, the solar panel unit should have a capacity of up to 5MW, and you must have an Export MPAN.
EDF Energy SEG Tariff
EDF Energy isn’t one of the most well-paying energy companies, offering just about 1.5p per kWh for every unit of renewable electricity.
As soon as you get accepted to the plan, you’ll have to provide the energy supplier with your initial meter reading. Following that, the readings have to be taken every quarter until the plan expires.
If you want to get on this plan, you need an MPAN, an export meter, and a certified solar PV system with a maximum capacity of up to 5MW.
The “Export + Earn” tariff plan is for 12 months, after which the payments will stop if you do not sign a new contract.
Who Is Eligible To Receive SEG Payments?
There are certain qualifications that customers need to meet if they wish to apply for SEG.
Let us glance over the eligibility criteria:
- Be located in the United Kingdom
- Have an MCS-certified installation
- Generate renewable energy at home through any one of the following – hydro, micro combined heat, solar PV, wind, or anaerobic design
While a smart meter is not necessary, it is good to have an export meter that ensures you receive accurate payments.
Additionally, there are a few documents required for applying to the scheme:
- Ownership proof
- Application form from the SEG licensee’s website
- Additional form for anaerobic digestion
Once submitted, you can expect your application to be processed in 28 days.
Are SEG And Feed-in Tariff The Same?
Feed-in Tariff is an initiative under which households producing their own renewable electricity were paid. However, it was closed to fresh applicants after the end of March 2019.
FiT payments consist of two parts: the generation tariff and the export tariff. The former was a payment for the total electricity generated calculated on a per-unit basis. Meanwhile, the export tariff was a payment for the electricity units exported to the National Grid.
Although the SEG and Feed-in Tariff (FiT) might appear similar, the SEG can be thought of as FiT’s successor. The Feed-in Tariff (FiT) payments were distributed by the government. However, energy suppliers pay out the SEG. Moreover, the rate for FiT payments was set by Ofgem while the energy suppliers set the SAG tariff rates.
Should You Change To The SEG If You Already Have The FiT?
The FiT rates are much generous as compared to SEG tariffs. If you’re already subscribed to receive FiT payments, you can continue to do so until the end of your contract unless you opt to receive FiT export payments.
It is highly unlikely that you will earn as much from SEG tariffs as you will with FiT. It happens because SEG tariffs only pay customers for the exact amount of renewable electricity exported. On the other hand, FiTs estimate your export to be half of the total energy generated by your system.
Launched in January 2020, the SEG scheme was designed to support the United Kingdom’s efforts to minimize its carbon emissions by 2050. Under the initiative, households are being encouraged to generate their own electricity from renewable sources with low carbon emissions.
While the fair rate is ascertained to be between 5p per kWh to 6p per kWh, various energy companies have their own rates. If you’re planning to switch to renewable energy sources, we hope this article helped you find out all the necessary information. And if not, what are you waiting for? Make the switch and do your bit to save the planet.