Smart Export Guarantee explained: what you actually get paid

If you generate electricity at home and send some to the grid, the Smart Export Guarantee is the mechanism that gets you paid for it. It replaced the closed Feed-in Tariff for new installations, and it works on a fundamentally different principle.

The short version: larger suppliers must offer you an export tariff, but nobody sets the price. That single design choice explains almost everything about how the scheme behaves, including why the gap between a good rate and a token one is worth real money every year.

What it obliges, and what it does not

Obliged: electricity suppliers with 150,000 or more domestic customers must offer at least one export tariff; smaller suppliers may opt in voluntarily. Per Ofgem’s scheme rules, the tariff must pay more than zero per kilowatt hour and must be available to eligible generators.

Not obliged: any particular rate. There is no floor beyond being above zero, no cap, and no standard.

The result is a market rather than a subsidy, and the spread is not theoretical. One supplier illustrates it by itself: Octopus pays 4.1p per kilowatt hour on its basic SEG tariff and 12p on Outgoing, its better rate for customers who also import from it. A household exporting 2,000 kilowatt hours a year collects £82 on the first and £240 on the second. Same roof, same electrons, £158 a year of difference produced entirely by which tariff the paperwork lands on.

This is the most important practical fact about the scheme, and the reason “what does the SEG pay” has no single answer.

What you need to qualify

Three things, generally:

A qualifying installation. Solar photovoltaic, wind, hydro, anaerobic digestion or micro combined heat and power, up to 5MW of installed capacity (50kW for micro-CHP), which covers domestic solar many times over.

Certification. MCS registration for the installation and installer, or an equivalent scheme. This is what a supplier relies on to establish the system is what you say it is; without it, suppliers will generally refuse to register you, which is why the cheapest uncertified quote can cost you every export payment the system would ever have earned.

An export meter capable of half hourly readings. In practice a smart meter. You are paid for metered export, not for an estimate.

You can split your import and export suppliers

This is routinely missed and it is worth money.

Your export tariff does not have to come from the supplier you buy electricity from. You can take the cheapest import tariff you can find and the best export rate you can find, from two different companies.

Some of the most attractive export rates are offered on condition that you also import from the same supplier, as the Octopus example above shows. Those conditions are legitimate, and they need to be judged as a package: a strong export rate attached to a poor import tariff may leave you worse off overall, because most households import far more than they export. Work out the total annual position under each combination, not the export line alone.

Fixed against variable rates

Fixed pays the same per unit whenever you export. Predictable and easy to model.

Variable tracks wholesale prices, changing through the day and the year. It can pay substantially more at times of high demand, and very little at times of abundant generation, which often means the sunny afternoons when you are exporting most. That correlation is the catch to understand before being tempted by a variable tariff’s headline peaks: your export is concentrated exactly when solar export across the whole country is, which is when wholesale prices sag.

Neither is automatically better. Fixed suits a household that wants a number it can plan around; variable suits one with a battery that can hold export back for the evening peak, and an owner willing to pay attention.

What it is not

It is not the Feed-in Tariff. The old scheme paid a generation tariff for every unit produced, whether you used it or exported it, plus an export payment, and it closed to new applicants in March 2019. Existing FiT recipients keep their terms; nothing about the SEG affects them.

Under the current arrangement you are paid only for what you export. Units you use yourself earn nothing directly. They save you the import rate instead, which is worth a good deal more: 26.11p per kilowatt hour on the current price cap, against even the better export rates around 12p.

Why this makes self consumption the priority

Because export rates sit well below import rates, the same kilowatt hour is worth roughly twice as much used at home as sold. Everything sensible about running a system follows from that: shift loads into daylight, consider a diverter for hot water, and consider storage if the gap between your rates is wide, judged with the honest per-cycled-unit arithmetic rather than a brochure figure.

Export payments are a useful backstop for the surplus you genuinely cannot use. They are not where the return mainly comes from, and a decent export rate quietly weakens the case for a battery, because it shrinks the gap the battery earns.

Checking an offer

• What is the rate, and is it fixed or variable?
• Is it conditional on taking an import tariff too?
• How long is it guaranteed, and what notice applies to changes?
• What certification and metering does it require?

Then put the rate into a projection alongside your import rate, as two separate inputs: the ROI calculator keeps them separate throughout, because blending them into one average is the single most common way export income gets silently overstated.