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Financial support for renewable technology

Smart Export Guarantee

  1. Which renewable energy installations are eligible?
  2. How much will I receive for exporting electricity?
  3. Can I combine SEG with other grants and financial support?
  4. SEG and energy storage
  5. Alternative finance arrangements

Benefits

  • earn money for exporting excess renewable electricity
  • choose the best tariff
  • combine payments with other grants and financial support

The Smart Export Guarantee (SEG) is a support mechanism designed to ensure small-scale generators are paid for the renewable electricity they export to the grid. It has been in place since 1 January 2020. You may be eligible to apply if you have one of the following renewable energy generating technologies:

  • solar PV panels
  • a wind turbine
  • hydro
  • anaerobic digestion
  • micro combined heat and power (micro-CHP)

Following the closure of the Feed-in Tariff (FIT) scheme to new applicants in March 2019, the government recognised the need to pay small-scale renewable energy generators for the electricity they export to the grid. Consequently, the Department for Business, Energy and Industrial Strategy (BEIS) introduced the Smart Export Guarantee (SEG).

Under the scheme, all licenced energy companies with 150,000 or more customers must provide at least one SEG tariff. Smaller suppliers can offer a tariff if they want to on a voluntary basis. All suppliers can also choose to offer other means of making payments for exported electricity, separate to the SEG arrangements (see ‘Alternative finance arrangements’ below).

If you already receive a FIT on your installation, this is unaffected by the introduction of the SEG.

Which renewable energy installations are eligible?

The following renewable energy installations are eligible for the smart export guarantee:

  • solar PV systems, onshore wind, anaerobic digestion, hydro – up to 5MW
  • micro-CHP – with an electrical capacity of up to 50kW

Any typical domestic system would be well within these size limits.

The technology and installer used by householders must be certified under the Microgeneration Certification Scheme (MCS) or equivalent. Energy suppliers may ask you to provide a MCS certificate to prove your installation meets this standard.

You will also need a registered smart meter that records your exported electricity, even if you’re not signing up to a smart tariff.

How much will I receive for exporting electricity?

There are no set or minimum tariffs for the SEG – the only requirement is that the tariff must be greater than zero at all times. In practice, this means that it is up to energy suppliers to decide what tariffs to offer their customers. They may choose to offer multiple tariffs or just one.

SEG tariffs can be fixed or variable. A fixed SEG tariff will pay a determined rate per kWh of electricity exported over the length of the contract. A variable SEG tariff will vary the price based on market demand, with the only requisite that prices never fall below zero. Ofgem will report on the tariffs available, as well as how many people are on them, each year.

Can I combine SEG with other grants and financial support?

Yes. The only exception is if you already receive payments under the FIT scheme. You cannot receive both FIT export and SEG payments, although you can choose to opt out of your FIT (export) payments and receive SEG payments instead, while continuing to receive FIT generation payments.

SEG payments are not linked to other financial support around renewable energy installations. This means that, if eligible, you could combine SEG payments with other financial support, In Scotland, for example, you could combine SEG payments with the Home Energy Scotland loan.

You will not be able to receive SEG from more than one supplier.

SEG and energy storage

If you’ve included an energy storage system in your renewables installation, you can still apply for SEG, but there might be a few rules, depending on your SEG contract. Your battery could store electricity from the grid (known as brown electricity) before exporting it later on.

Energy suppliers do not have to pay you for brown electricity exported to the grid but they may choose to do so.

Some suppliers may only pay the SEG for green electricity, ie the electricity your low-carbon system generates itself. If this is the case, the supplier may ask you to show how you separate out the green electricity you generate from any imported brown electricity. Speak to your installer about how to do this.

Alternative finance arrangements

In addition to SEG, energy suppliers are offering similar deals by paying customers set tariffs for electricity they export to the grid. Deals are specific to each household and could involve your generation and supply being metered. Deals may also be time limited and have other conditions, such as requiring you to purchase your supplied electricity from the same supplier. You should consider all terms and conditions carefully in order to make the best choice.

The Solar Trade Association website lists the current deals available.

If you are based in Scotland and haven’t yet installed a renewable electricity technology such as solar PV, you may be able to apply for the interest-free Home Energy Scotland loan to help with the initial costs. To be eligible for the loan you must not start work on your system until you have received a written loan offer.

Read our response to the Smart Export Guarantee consultation.

Further reading