The rising cost of energy bills and concerns about the impact of traditional energy sources on the environment are major pain points for many people in the UK. Investing in solar panels and other forms of renewable energy can be an effective solution. Still, the cost and return on investment can be a significant concern for households and businesses.
The Smart Export Guarantee SEG alleviates these concerns by providing a minimum payment for excess electricity generated by small-scale renewable energy installations.
With an increasing demand for renewable energy installations, more and more households and businesses in the UK are turning to solar power as an alternative to traditional energy sources. However, one of the biggest concerns for those considering renewable electricity is the cost and return on investment.
This article is for households and businesses in the UK who are considering investing in solar power or other forms of renewable energy.
At Skylamp Solar, we are committed to helping our customers make the most of renewable electricity, including the latest government policies and incentives. We aim to provide clear and concise information on the Smart Export Guarantee rates and how they can benefit those looking to generate and export their excess renewable energy.
The Smart Export Guarantee is a program implemented by the UK government that allows energy consumers to earn money by exporting excess electricity generated from renewable sources back to the National Grid.
Under this program, energy suppliers with more than 150,000 customers must offer an export tariff to their customers.
Under SEG, eligible customers will receive a payment for each kilowatt-hour (kWh) of electricity they export back to the grid. The rate at which energy suppliers pay for each kWh exported will vary depending on the energy supplier and the time of day.
To participate in SEG, you must have an eligible renewable energy system installed, such as solar panels. You will also need to have a smart meter installed to track how much energy you are exporting to the grid, but these are common features in a growing number of homes these days.
Knowing that the best Smart Exposure Guarantee Rate isn’t set in stone is essential. Rates change, and energy suppliers will offer improved rates from time to time. There will be times when this is a purely commercial decision as opposed to anything tied to the cost of energy, so consumers need to stay in touch with changing rates.
This is where Skylamp Solar aims to help you, as we provide you with an updated league table relating to the best rates and rates you should avoid.
For example, at the start of 2023, Octopus had a Smart Export Guarantee rate of 15p per kWh, which is far more appealing than the figure on offer from many firms. Expect energy companies like E, EDF Energy or Scottish Power to alter their SEG tariffs as the year progresses.
When rates change, we’ll update you, and if a new rate is more appealing than others, you’ll know.
By comparison, at the time Octopus Energy offered 15p per kWh, the typical rate paid by consumers for electricity stood at 34p per kWh. However, the rapid increase in energy prices of late makes these comparisons unhelpful for relevance. Hopefully, energy prices will fall to something more reasonable before long.
Again, if they do, or if SEG tariffs improve, we’ll inform you.
In comparison with the previous system, the Feed-In Tariff rate concluded with an export tariff of 3.8p per kWh in 2019.
There are calls to increase the price households receive when selling unused energy to the National Grid as part of the ongoing support offered to homes.
There are several benefits to participating in the Smart Export Guarantee program. Firstly, it allows you to earn money for the excess energy your renewable energy system generates. These SEG payments offset the cost of your system and reduce your overall energy bills.
Secondly, participating in SEG helps to reduce carbon emissions and supports the transition to a more sustainable energy system. By exporting energy back to the grid, you are helping to reduce the demand for energy generated from non-renewable sources, so there is a big environmental benefit from your exported electricity.
Thirdly, participating with Smart Export Guarantee tariffs allows you to be more energy independent. By generating your own renewable energy, you are less reliant on traditional energy suppliers.
Obviously, being able to receive SEG payments is a massive benefit, and the tariff impacts this, but there are other reasons why people participate in SEG.
To participate in the Smart Export Guarantee program, users need to follow these steps:
Households with renewable installations with a capacity of up to 5 megawatts (MW) and meet the Microgeneration Certification Scheme (MCS) or equivalent requirements are eligible for the SEG.
Households must have an export meter installed that measures the amount of electricity exported to the grid. This meter reading will determine any SEG payments. The smart meter must offer half hourly readings for the household to be eligible to receive SEG payments.
Energy suppliers must offer at least one SEG tariff to customers who generate and export energy to the grid. Households can choose a fixed or variable tariff, and the tariffs' rates and terms and conditions must be published on the supplier's website.
The minimum contract duration for the SEG tariff is one year, and households can choose a tariff with a contract duration of between one and two years.
Suppliers must offer at least one payment method for the SEG, either as a fixed payment rate per kWh of exported electricity or as a variable rate that changes depending on market conditions.
The SEG payments must be made at least once every 12 months, so you'll receive payments at once a year if eligible. Suppliers must provide households with a statement that shows the amount of electricity generated and exported, the payment rate, and the total payment.
If the installation does not have an export meter, households must use a deemed export rate to estimate the electricity exported to the grid. The deemed export rate stands at 50% of the total electricity generated by the installation.
The SEG does not apply to installations commissioned before 1 January 2020 or to installations eligible for the Feed-in Tariff (FIT) scheme.
Households are not required to register with Ofgem to participate in the SEG, but suppliers must register to offer an SEG tariff.
Suppliers must have a complaint handling procedure in place for SEG customers, including households, and they must provide information on how to make a complaint.
Overall, the Smart Export Guarantee scheme provides a financial incentive for households to generate energy and export any excess electricity to the grid while helping reduce carbon emissions and combat climate change.
Once the smart meter is installed and the supplier is selected, the householder doesn't need to do anything else. The smart meter will automatically record the amount of energy being exported, and the supplier will pay the householder for that energy at the agreed-upon export tariffs.
So, while there is some initial effort required to set up the smart meter and choose a supplier, the actual process of selling energy back to the grid is automatic once everything is in place.
This is great news, as you don't have to worry about the process, all you need to do is choose the supplier with the most appealing SEG tariff, and they'll do the rest.
Given the limitations of solar energy, requiring daylight to be effective, it is understandable that many households invest in solar battery storage. This setup saves energy from the daytime and allows it to be used at night when no sunlight powers the property.
Of course, with the SEG setup, this unused energy is typically sent to the grid, potentially creating a conflict of interest.
The topic of solar batteries requires a more in-depth approach to explain it. Still, to ensure everything understands how a solar battery works and how it impacts the use of SEG, the following is a quick overview of how solar panels work with a solar battery:
Solar PV systems absorb sunlight and convert it into electricity.
When the solar panels generate more electricity than is needed, excess electricity is stored in a battery.
When the solar panels are not producing enough electricity, such as at night or on cloudy days, the stored electricity in the battery can be used to provide power to the home or business.
In summary, adding battery storage to the SEG allows for more efficient use of the energy generated by solar panels, as it can be stored and used when needed rather than being wasted or sent back to the grid. This can help reduce reliance on fossil fuels and lower energy costs over time.
Of course, depending on how much electricity you use, the SEG sends unused energy to the grid, so there is a conflict of interest here.
If you store excess solar power energy in batteries, you don’t sell it back to the grid so that you won’t be eligible for SEG.
Then again, if you use some stored energy at home and sell excess power, you’ll receive payment for this sale. Not every energy supplier has the same approach to managing solar battery usage with the SEG, so clarify this when signing with an electrical supplier.
Yes, you do not have to enter into an agreement with your current energy supplier; you can choose any supplier for the SEG system, and of course, each company can set their own SEG tariff.
All energy companies that participate in the SEG scheme must accept readings from the smart export meter, regardless of which company installed the meter or which company the homeowner is currently using as their energy supplier.
This means that homeowners can choose to switch energy suppliers at any time without having to change their export meter, helpful if you want to receive the best export tariffs.
It's worth noting, however, that not all energy suppliers currently offer export tariff payments under the SEG tariff offering, so homeowners will need to check with potential suppliers to ensure that they are able to take advantage of the scheme.
The amount of money a household can save through the SEG scheme differs on many factors, including the export tariff at the time. Users should review the Energy Saving Trust calculator to determine the amount they can save. This will help families determine if investing in solar PV or agreeing to the SEG setup is worth their time.
The Smart Export Guarantee offers a valuable financial incentive for households and businesses in the UK to generate and export their own renewable energy. By providing a minimum payment for excess electricity, the SEG can help to offset the costs of installing and maintaining solar panels and the electricity bill itself.
So, with attractive SEG tariffs on offer, there is a compelling short and long-term argument for this process, and we'll ensure you receive all the information you need to make an informed decision.
Skylamp Solar is committed to helping our customers make the most of energy solutions and government policies such as the Smart Export Guarantee. We understand that keeping up to date with the latest metered export rates and information can be a challenge, so we encourage our readers to check back regularly for updated rates and information or to contact us directly for the latest guidance.
Whether you are a household or business looking to invest in renewable energy or are simply curious about the benefits of solar power, our team of experts is here to help. Contact us today to learn more about the Smart Export Guarantee, SEG payments and our range of solar pv systems and other renewable energy solutions.
Together, we can work towards a greener, more sustainable future for all.
