What Is the Smart Export Guarantee (SEG) and How Does It Work?

Imagine you’ve just installed solar panels on your roof. The sun shines brightly, your panels are generating electricity, and you’re using that clean energy to power your home. But what about the times when your panels produce more electricity than you actually need? Wouldn’t it be great if you could get paid for that extra power instead of just letting it go to waste?

That’s exactly what the UK’s Smart Export Guarantee (or SEG) does. It’s a government-backed scheme designed to pay homeowners for the surplus renewable electricity they export back to the grid. Whether you’re new to solar or already have panels, understanding the SEG can help you maximise your savings and even earn money from your rooftop.

In this article, we’ll explain what the Smart Export Guarantee is, how it works, who’s eligible, and why it’s such a big deal for solar energy in the UK.

What Is the Smart Export Guarantee (SEG)?

The SEG is a government scheme launched in January 2020 that requires licensed electricity suppliers in the UK to pay small-scale renewable energy generators for the excess electricity they send back to the national grid. This includes solar panels, small wind turbines, hydro, and anaerobic digestion systems.

It replaced the older Feed-in Tariff (FiT) scheme, which ended in March 2019. Unlike FiT, which paid for all the electricity generated, SEG pays only for the exported electricity—the surplus you don’t use yourself.

The Department for Energy Security and Net Zero oversees the scheme, and detailed guidance is available on the official UK government website. This ensures homeowners are fairly compensated and encouraged to produce clean energy.

Export Tariffs 2025: What You Need to Know” — learn more about current tariff rates and changes

How Does SEG Work?

Here’s a simple step-by-step on how the SEG works in your home:

1. Solar Panels Generate Power: Your system converts sunlight into electricity.
2. You Use What You Need: The electricity first powers your home appliances.
3. Surplus Electricity Goes to the Grid: Any extra electricity you don’t use is sent back to the national grid.
4. Smart Export Meter Measures It: A smart export meter (or equivalent) records the amount of electricity exported.
5. You Get Paid: Your energy supplier pays you for the electricity you export based on an agreed tariff.

You’ll deal mainly with three groups:

• You, the homeowner or business generating electricity.
• Your energy supplier, who buys your excess power under the SEG scheme.
• The government, which regulates the scheme to make sure payments are fair and reliable.

“Can You Sell Excess Power Back to the Grid? Here’s How” — Understand the basics of electricity export

How Does SEG Work with Solar Batteries?

When you have solar panels and a solar battery, your system can store excess electricity generated during the day instead of sending it straight to the grid. This means you can use more of your own solar power later—like in the evening or on cloudy days—reducing how much electricity you buy from the grid.

But what about the SEG?

• The SEG only pays you for the electricity you export back to the grid.
• With a battery, you’ll likely export less electricity because you’re storing and using more onsite.
• Any electricity you do send to the grid (after your battery is full or if you generate more than your battery can store) can be exported under the SEG, and you get paid for it.
• To participate, you still need a smart export meter that measures the electricity exported to the grid.

So, a solar battery can reduce your exported power and thus the amount you earn under SEG—but it helps maximise your overall savings by cutting down on grid electricity usage.

Who Is Eligible for SEG?

To qualify for the SEG, your setup must meet certain criteria:

• You need a small-scale renewable energy system, like solar panels, wind turbines, or hydro power.
• Your system must be connected to the UK’s national electricity grid.
• The capacity of your system must be 5 megawatts (MW) or less — which covers almost all residential installations.
• You must have an export meter or a smart meter capable of measuring exports.
• You need to be with an energy supplier that offers SEG tariffs — not all suppliers participate, so it’s worth shopping around.

Most domestic solar panel owners meet these requirements. If you’re unsure, you can check official resources like the Energy Saving Trust or your installer can help confirm eligibility.

What Are the Benefits of SEG?

Financial Perks

• Get Paid for Extra Electricity: You earn money on electricity your panels produce but you don’t use.
• Lower Your Bills: By generating your own electricity, you reduce the amount you buy from the grid.
• Competitive Rates: Different suppliers offer varying SEG tariffs, so you can shop around for the best price.

Environmental Impact

• Reduce Carbon Emissions: By exporting renewable electricity, you help cut down on fossil fuel use.
• Support Renewable Energy Growth: The SEG encourages more people to invest in solar and other renewables, helping the UK meet its climate goals.

How Do You Apply for SEG?

Here’s what you need to do:

1. Confirm Your System Meets Eligibility: Check your renewable technology and metering.
2. Find an Energy Supplier Offering SEG: Compare tariffs and choose the best deal.
3. Apply for the Scheme: Contact your chosen supplier, provide proof of your system, export meter readings, and other documents.
4. Sign a Contract: Agree on terms and start exporting.
5. Receive Payments: Your supplier pays you, typically every quarter.

For detailed guidance, visit the official Ofgem Smart Export Guarantee page — the regulator overseeing the scheme.

Conclusion

The Smart Export Guarantee is an important step in making solar energy work better for UK homeowners. By rewarding you for the surplus electricity you export, it turns your solar panels from just an energy saver into a potential money earner. Plus, it helps build a cleaner, greener electricity system for everyone.

If you have solar panels—or are thinking about installing them—make sure to explore your SEG options. It’s one of the simplest ways to get more from your solar investment while helping the planet.

FAQ: Smart Export Guarantee (SEG)

1. What exactly is the Smart Export Guarantee (SEG)?

SEG is a UK government-backed scheme that pays you for any surplus renewable electricity your home solar panels or other small renewable systems send back to the national grid.

2. Who can get paid under the SEG?

If you have a small-scale renewable energy system (like solar panels) connected to the grid with an export meter and sign up with a supplier offering SEG tariffs, you can qualify.

3. How much money can I earn with the SEG?

Payments vary depending on your energy supplier’s tariff rates and how much electricity you export. Rates can differ, so it’s worth comparing suppliers to find the best deal.

4. Do I need a special meter for SEG?

Yes. You’ll need a smart export meter or an export-capable smart meter to accurately measure how much electricity you export to the grid.

5. How does having a solar battery affect SEG payments?

With a battery, you store extra solar energy to use later, which usually means you export less electricity. You only get paid for the electricity you actually send to the grid, so SEG payments might be lower—but your overall savings usually increase because you buy less energy from the grid.

6. Can I switch energy suppliers to get a better SEG rate?

Yes, you can shop around and switch suppliers if they offer a better SEG tariff. Just make sure the new supplier supports SEG and understands your setup.

7. Is SEG the same as the old Feed-in Tariff scheme?

No. The Feed-in Tariff paid for all electricity generated, whether you used it or exported it. SEG only pays for the exported electricity, encouraging you to use more of your solar power at home.

8. How do I apply for SEG payments?

You contact an energy supplier offering SEG tariffs, provide details about your system and meter, agree to the terms, and start exporting electricity to the grid.