The Independent’s journalism is supported by our readers. When you purchase through links on our site, we may earn commission. Why trust us?
The Smart Export Guarantee (SEG) is part of a series of government incentives encouraging UK homeowners to switch from an expensive reliance on the grid, take a more self-sufficient, cost-effective approach to powering their homes using solar panels and save as much as £642 per year in the process.
Below, we’ll explain the SEG and uncover which technologies it covers and what you’ll need to do to be eligible. We’ll also discuss the different types of SEG tariffs available, compare rates from top suppliers in the UK and walk you step by step through how to apply to the SEG in 2024.
The SEG is a government scheme enabling homes in the UK to export any electricity they generate through low-carbon means – such as wind or hydropower – to the grid in exchange for a payment.
SEG payments and the savings you’ll make on your energy bills will go a long way in dictating how quickly you’ll be able to recoup the initial costs of your solar panel investment.
The SEG is like paying your electricity bill but in reverse. Instead of paying an electricity supplier to light and heat your home, they’re paying you for your generated electricity.
Energy suppliers who offer SEG tariffs are known as SEG licensees, and you must apply to one before you can start selling your energy back to the grid through them. Don’t worry about getting turned down, as an SEG licensee must offer you a tariff if you’re eligible.
SEG tariffs are only available to homes generating electricity through renewable sources. These include solar photovoltaic (PV), wind, micro-combined heat and power (micro-CHP), hydropower and anaerobic digestion (AD).
PV panels are normally mounted on the roof of your home. Exposed to a steady stream of sunlight, these panels will supply your household with a sustainable, guilt-free source of renewable energy.
Solar panels are made up of multiple cells with conductive materials, generally created from silicon. When the sunlight hits these cells, it excites the electrons in the silicon atoms, creating a current as the electrons flow through each panel. An inverter converts the direct current (DC) electricity produced into the alternating current (AC) kind – the type used by homes that you can sell back to the grid via the SEG.
To learn more, compare the best solar panels on the market with us, or browse our guide to the UK’s cheap solar panels to make your money go further.
When you combine your domestic solar array with a solar storage battery, you can sell the electricity you aren’t using back to the grid and store it for later. By doing this, you can draw on that surplus when electricity is in peak demand or if prices are exceptionally high.
Solar batteries can secure a higher SEG tariff depending on the licensee you opt for. Some of the best pence per kilowatt hours (p/kWh) SEG rates on the market – Octopus Energy’s Intelligent Octopus Flux (35p) and Octopus Flux (30p) tariffs, as well as Good Energy’s Solar Savings Exclusive (20p) – are only available with a solar battery.
Remember that these offers may also come with restrictions around where your solar battery comes from, and you may require a specific type or brand to be eligible.
Be sure to read the SEG licensee’s terms and conditions before purchasing a solar battery.
To harness wind power, you’ll need a domestic wind turbine. These work like large-scale wind turbines, but on a smaller scale, they can squeeze into your back garden.
Domestic wind turbines capture the wind’s kinetic energy through rotor-mounted blades. When the wind blows, it spins the blades; a generator converts this mechanical energy into usable electrical energy. Un like solar panels, wind turbines produce ready-to-use AC electricity for your home, so no additional conversion process from DC is necessary.
Micro-CHP units generate heat and electricity at the same time. This process, called cogeneration, uses a small internal combustion engine or fuel cell to produce electricity. Micro-CHP systems also recover the heat produced throughout this operation – usually in the form of steam or hot water – so it can be reused. Micro-CHP units can replace traditional boilers in the future.
Unlike large-scale hydropower developments – which require huge dams and reservoirs – domestic setups are designed to harness the power of flowing water on a much more modest scale. That said, you’ll still require a constant, reliable source of moving water to access domestic hydropower: a stream, river or even a small waterfall will do.
A hydropower system works by funnelling that flowing water through a penstock (a pipeline or channel that helps move the water in the right direction) to a turbine. Similarly to a wind-powered machine, the water causes the turbine’s blades to rotate. This generates AC electricity, which can then be used to power your home or be sold to the National Grid.
AD is the use of bacteria to break down organic materials (such as food waste, agricultural residue, sewage sludge and animal manure) in the absence of oxygen. It’s a natural, biological process that occurs in oxygen-free environments, including landfills, marshes and the digestive systems of animals.
To harness AD in the context of domestic renewable energy production, you’ll need a small-scale anaerobic digester installation. This is a machine into which you can feed organic materials – such as food offcuts or leftovers – to be digested by microbes.
The process creates biogas (a mix of mainly carbon dioxide and methane), which can be used as a renewable fuel, either to burn directly in a stove, heater or boiler or to power a generator for lighting and heating your home, as well as keeping your appliances running. The digestate (what’s left after the bacteria has done its work) contains valuable nutrients, such as nitrogen, potassium and phosphorous, so it makes an excellent fertiliser for your garden!
To be eligible to receive payments via the SEG for the excess electricity you export to the grid, you’ll need to satisfy the following requirements:
There are three types of SEG tariffs in 2024: fixed, flexible and multi-rate. Below, we’ll explain what each one looks like and unpack their key pros and cons.
Fixed SEG tariffs offer you a set p/kWh rate for the duration of your contract. For example, this might be a provider offering you 4p for every kilowatt hour (kWh) of electricity you export, regardless of the hour or day of the week you export it.
Flexible SEG tariffs go up and down based on the time of day you’re exporting your electricity. When electricity demand is higher, your SEG rate will be, too. However, during off-peak hours, you can expect to receive less for the electricity you export.
Multi-rate SEG tariffs are a mix-and-match approach. Like a flexible tariff, what you’ll pay depends on when you’re exporting the electricity, but – like a fixed tariff – these fluctuations are tied to specific, fixed amounts. For instance, an energy supplier offering a multi-rate tariff might pay 3.5p/kWh on weekdays and 5p/kWh on weekends.
The first thing to remember when choosing an SEG tariff supplier is that there are no set SEG rates – the only requirement is that they must be more than zero.
This lack of a proper p/kWh benchmark makes choosing an SEG supplier even more critical and tricky. We’ve rounded up a list of the UK’s top SEG suppliers – and the tariff types and rates they offer – to help you pick the right one for your budget and lifestyle.
Remember, you don’t need to receive energy from any suppliers here to access their SEG tariffs. Your energy supply and SEG payments are separate – and if you want to work with two different companies to meet these two separate needs, you absolutely can.
| Supplier name | Tariff type | Tariff name | Rate for customers (per/kWh) | Do you need to be a customer? |
| British Gas | Variable | Export and Earn Plus | 15p | ✔ |
| British Gas | Variable | Export and Earn Flex | 6.4p | X |
| E Gas & Electricity | Variable | E SEG January2020v.1. | 1p | X |
| E.ON | Fixed (12 months) | Next Export Exclusive | 16.5p | ✔ |
| EDF | Variable | Export Variable Value | 5.6p | ✔ |
| EDF | Variable | Export Variable | 3p | X |
| Good energy | Variable | Solar Savings Exclusive** | 20p | ✔ |
| Good energy | Variable | Solar Savings | 15p | ✔ |
| Octopus Energy | Agile | Intelligent Octopus Flux*** | 35p | ✔ |
| Octopus Energy | Agile | Octopus Flux**** | 30p | ✔ |
| Octopus Energy | Fixed | Outgoing Fixed | 15p | ✔ |
| Octopus Energy | Fixed | Outgoing Fixed Lite | 8p | ✔ |
| Octopus Energy | Fixed | Outgoing Go | 4.1p | X |
| OVO Energy | Variable | OVO SEG Tariff | 20p | ✔ |
| OVO Energy | Variable | OVO SEG Tariff | 4p | X |
| Pozitive Energy* | Variable | SEG tariff | 5p | X |
| Rebel Energy* | Fixed (12 months) | SEG Tariff Snail | 10p | X |
| Scottish Power | Variable | SmartGen+ | 15p | ✔ |
| Scottish Power | Variable | SmartGen | 12p | X |
| Shell Energy | Variable | (SEG) V1.1 Tariff | 3.5p | X |
| So Energy | Variable | So Export Flex | 7.5p | X |
| The Utility Warehouse | Variable | UW SEG – Bundle | 5.6p | ✔ |
Think of the difference between fixed and variable SEG tariff contracts like a mortgage:
The amount your domestic renewable setup can earn you through the SEG will depend on the type of technology and the size of the system – but it could be as much as £642 per year.
Below, we’ve summarised the SEG earnings you could see in as little as a year with a domestic solar panel installation. We’ve used three SEG tariff rates – 5p, 10p and 15p/per kWh, respectively – to demonstrate the importance of choosing the right supplier.
| System size | Estimated installation cost | Energy generated per year | SEG payments (15p/kWh) | SEG payments (10p/kWh) | SEG payments (5p/kWh) |
|---|---|---|---|---|---|
| 3 kW | £4,957 | 2,199kWh | £243 | £162 | £81 |
| 4kW | £5,942 | 2,826kWh | £342 | £228 | £114 |
| 5kW | £6,928 | 3,532kWh | £441 | £294 | £147 |
| 6kW | £7,913 | 4,238kWh | £540 | £360 | £180 |
| 7kW | £8,899 | 4,945kWh | £642 | £428 | £214 |
The best part? This table doesn’t even include the savings you’ll see off your energy bill.
According to Energy Saving Trust data, these savings could be £168 per year with a 3kW system and as much as £226 per year with a 7kW system.
That means, considering SEG payments and regular energy-bill savings, it could take just over eight years for your 7kW solar panels – and less than 12 years for your 3kW solar panels – to cover their installation costs. (Based on an SEG tariff of 15p/kWh.)
After that, it’s all profit. Plus, home buyers are willing to pay, on average, £2,038 more for homes with solar panels already fitted.
Ready to apply for the SEG? Here’s how.
If you’re already receiving export payments under the FiT scheme – the SEG’s predecessor – you’ll be unable to receive SEG tariffs.
Launched on 1 April 2010, the FiT allowed homeowners generating their renewable electricity (the FiT “installation”) to apply to become accredited as FiT “generators”. After registering with their pick of participating electricity suppliers (the FiT “licensees”), these homeowners could begin selling excess electricity back to the National Grid.
However, FiT closed to new applications on 1 April 2019, but this won’t affect existing FiT generators, who can continue to receive FiT payments for as long as their installation’s eligibility period lasts. Typically, this is 20 years, although it can vary from 10 to 25 years depending on the renewable installation’s capacity, type and commission date.
If you currently receive FiT payments, you can opt out and jump ship to SEG. However, we’d recommend considering this carefully first. No evidence suggests that SEG tariffs pay more than their FiT counterparts. You may even receive a higher per kWh rate on the FiT than through the SEG.
The bottom line? If your domestic renewable energy setup was accredited under the FiT before its closure to new applicants in April 2019, you can continue to receive FiT payments for the entirety of your eligibility period. You’ll also be unable to access SEG tariffs unless you switch to the SEG. Otherwise, you can participate in the SEG, providing your renewable setup meets the government’s eligibility requirements above.
The difference between SEG and FiT payments is that they belong to two separate – albeit highly similar – government renewable incentive schemes. Also, only one – the SEG launched on 1 January 2020 – is still accepting new applicants. The FiT closed to new applicants in April 2019, but homes signed up to it will still be able to receive FiT payments for as long as their contract (typically 20 years) allows.
The other difference is that under the FiT, eligible electricity-generating households receive two payments:
Under the SEG, you only receive the export tariff, which is the electricity you export to the grid.
Also, the SEG tariff rates are set by the suppliers offering them; FiT rates, by contrast, were set by the government and Ofgem. You’re not allowed to receive both FiT and SEG payments, but existing FiT participants can opt out of that scheme to join the SEG if they wish.
Yes, you can accept SEG payments on a domestic renewable installation you purchased with the help of a government scheme or incentive.
To learn more about these, explore our guide to solar panel grants and how to access them.
No, chances are you won’t have to pay tax on any income you make through the SEG.
However, this is conditional on your renewable generational equipment – your solar array or wind turbine, for example – being located on a property you own or nearby and that you don’t plan to produce more than 20 per cent more power than you need for your consumption.
Yes, you do. If you want to be eligible for an SEG tariff to sell your electricity back to the grid, you’ll need to demonstrate that your renewable energy system’s solar installer and array are accredited through the MCS.
The MCS is an internationally recognised accreditation scheme for small-scale sustainable energy technologies, such as wind, solar and hydropower generators. It proves that the company fitting your home with these technologies – and the processes and products they’re using – comply with the highest standards of safety, competence and quality.
