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The Smart Export Guarantee 2022

Big energy suppliers must pay you for your excess renewable energy

The best rate right now is 7.5p per kWh

The average home can make £112 per year from this scheme

Homeowners with solar panels are making money by selling their unused energy – and you should too.

Large energy suppliers in the UK are obliged to pay households for renewable energy they export to the National Grid, under the Smart Export Guarantee (SEG) scheme.

On this page, we’ll tell you how the SEG works, whether you’re eligible for it, and how much you could earn.

If you'd like to start benefiting from the SEG, you can fill in this form with a few details, and our trusted suppliers will contact you with free solar panel quotes.

What is the Smart Export Guarantee?

The Smart Export Guarantee is a government-backed initiative that compels large energy suppliers to pay homeowners for renewable energy they send back to the National Grid.

If you produce energy with solar panels, wind turbines, micro combined heat and power, hydro, or anaerobic digestion, you can request payments from one of more than a dozen companies.

SEG began in January 2020 as a replacement for the defunct Feed-in Tariff (FiT), but works differently – mainly because it puts the responsibility on consumers to choose the best rate.

It’s especially profitable for anyone with solar panels, because unless you have a solar battery, you’ll likely export half of your power back to the Grid – so why not get paid for it?

Smart Export Guarantee rates

15 companies are licensed to offer SEG rates, which can be any amount above zero.

This includes 12 which are compelled to, as they have at least 150,000 domestic electricity customers, and three that have voluntarily offered a tariff.

Here are the best and worst SEG rates out there, as of 2022.

Energy supplierPrice (p/kWh)Name of tariff
Tesla (requires Powerwall 2 battery)11Tesla Energy Plan
Octopus Energy (own customers)7.5Outgoing Fixed
EDF (own customers)5.6Export Variable Value
Bulb (own customers)5.57Export Payments
E.On (new E.On solar PV customers)5.5Next Export Exclusive
ScottishPower5.5Smart Export Variable Tariff
Pozitive Energy5SEG tariff
SO Energy5So Altair
Octopus Energy (non-customers)4.1Outgoing Go
SSE3.5Smart Export Tariff
Shell Energy3.5SEG V1.1 Tariff
British Gas3.2Export & Earn Flex
Utilita3Utilita Smart Export Guarantee
Bulb (non-customers)3Export Payments
E.On (all other customers)3Next Export
Utility Warehouse2UW Smart Export Guarantee
EDF1.5Export Variable
E1E SEG January2020v.1

What’s the best Smart Export Guarantee rate?

Octopus offers the best SEG rate (not Tesla, as we explain below), paying out 7.5p for every kWh of renewable electricity a household sends to the Grid.

This is only available to its own customers, though – it pays other households 4.1p per kWh. Octopus’s Christina Hess explained to The Eco Experts that this was because “it takes a lot of effort to set up an export tariff – the process is therefore quite costly for us.

“However, if a customer also imports electricity from us, we’re more likely to make a margin (please note that due to the current grid set up of network admin, levies and distribution costs it’s usually net negative for us to offer any kind of export tariff).

“This means that we are able to offer a better rate to customers who export and import electricity through us.”

You should also check out Octopus’s Agile Outgoing tariff, which pays you according to shifting wholesale prices.

This tariff has hovered around 20p per kWh so far this year – a fantastic rate – and went as high as £2.39 per kWh in September 2021, according to Energy Stats UK.

Wait, isn’t Tesla’s rate the best?

The highest rate is Tesla’s (administered by Octopus) – but it requires you to buy a Powerwall 2 solar battery, which currently costs around £9,000 to install.

The battery has a 10-year warranty, and will therefore need to be replaced for an additional £9,000 around halfway through your panels’ 25-year lifespan.

This completely negates the benefits of Tesla’s higher tariff, with the average three-bedroom household losing £4,900 over 25 years on this rate.

In contrast, that same home will make £8,600 over their panels’ lifespan if they opt against getting a Powerwall 2, and choose Octopus’s 7.5p per kWh rate instead.

What’s the worst Smart Export Guarantee rate?

E, which has 300,000 customers across the UK, pays the least for your renewable energy, handing over just 1p per kWh.

It’s also worth mentioning EDF’s paltry 1.5p per kWh rate, which is – at best – half as much as you’ll receive from the other Big Six suppliers, despite EDF making a net profit of €5.1 billion (£4.2 billion) last year.

In July 2022, after two and a half years of only offering this low tariff, EDF created an additional rate for its own import customers. The Export Variable Value pays 5.6p per kWh.

Is the Smart Export Guarantee good enough?

The Smart Export Guarantee is a positive development, but goes nowhere near far enough to reward solar households or encourage prospective buyers.

The best Smart Export Guarantee tariff is Octopus’s 7.5p per kWh offering, while the standard rate consumers pay for electricity is currently 28.3p per kWh.

That means the Smart Export Guarantee allows companies to buy electricity from you for, at most, 27% of the price they charge you.

At worst (yes E, we’re looking at you), this figure drops to 3.5%.

The 7.5p rate is at least higher than the Feed-in Tariff’s last export rate, which was 3.8p per kWh when it ended in 2019.

That shouldn’t be the benchmark, though. Energy prices have risen too far, too quickly for that number to be relevant.

The government rightly stepped in to ensure your unused solar power isn’t sent to the Grid for free, but solar panel owners are still being massively underpaid for the electricity they generate.

Can you choose any supplier?

Yes, you can choose any supplier for your SEG tariff.

It doesn’t have to be the supplier that provides you with electricity – so we advise you to find the best rate, and go for it.

Will the Smart Export Guarantee increase?

The Eco Experts contacted all 15 suppliers which provide an SEG tariff, and just two told us they were planning on increasing their rates.

So Energy, which currently offers a 5p per kWh rate, and EDF – which pays just 1.5p per kWh, as we mentioned above – were the only suppliers to commit to a higher tariff.

EDF has made good on this promise – though its tariff for non-customers is still appallingly low – but more suppliers need to raise their rates.

Energy companies currently pay households 13% of what their renewable energy is worth. Come October, when Ofgem's price cap rises, that figure is set to drop to a frankly appalling 7%.

You should still sign up for an SEG tariff, because otherwise you're leaving free money on the table – but your solar power is worth more than this.

How much money can you earn from the Smart Export Guarantee?

The average owner of a three-bedroom house with a 3.5 kWp solar panel system will earn £112 per year from the Smart Export Guarantee at the moment, on Octopus's 7.5p per kWh rate.

However, your household isn’t average – so we’ve created tables that show how you can expect the size and location of your home to affect your SEG earnings.

SEG income based on size of solar panel system

This table is an average look at the entire UK, which currently has a typical break-even time of 10.2 years.

As long as you buy the right size solar panel system for your home and pay a fair price (around £542 per panel), you should break even at this point, regardless of how large your house is.

However, the number of solar panels you have is vital in working out how much you’ll make from the SEG each year.

House sizeNo of panelsSystem kWpSEG profit (£)
1-2 bedrooms62.1£67
3 bedrooms103.5£112
4+ bedrooms144.9£157

SEG income based on location of solar panel system

Location is another crucial aspect in determining how much you’ll receive in annual SEG payments.

There can be as much as a 45% difference in how much you’re paid, purely because of how much sunshine you get where you live.

Here’s how much the owner of a 3.5 kWp system (which you’d typically put on a three-bedroom house) can expect to be paid annually in different parts of the UK.

RegionSEG paymentYears to break even
South East England£1279
South Wales£1249.2
North West England£11010.4
North Scotland£8812.9

If you want to take advantage of SEG payments, you can fill in this form with a few details, and our trusted suppliers will contact you with free solar panel quotes.

Is SEG income taxable?

Your SEG income will be exempt from tax, as long as:

  • Your solar array is located on a domestic property you own, or nearby
  • You don’t intend for your panels to produce significantly more solar power (usually interpreted as 20% more) than the amount of electricity you consume at home

If your installation doesn’t match these requirements, you may still be exempt.

You can class your SEG payments as trading and miscellaneous income, and provided your total income in this category doesn’t exceed £1,000, you won’t have to report it to HMRC.

How is SEG income paid?

If your SEG company also supplies your electricity, your payment may come in the form of a deduction from your monthly energy bill. If not, you’ll be paid by bank transfer.

Suppliers are allowed to choose how frequently they send these transfers – and they vary enormously.

For example, ScottishPower will pay you monthly, OVO’s payments are quarterly (as are E.On’s, as long as you request them each time), and SSE and Shell will pay you annually – though Shell will only send payments in May.

Make sure you check how often your SEG supplier intends to pay you.

How do you qualify and sign up for the SEG?

You can qualify for SEG payments if you generate energy in any of the following ways:

  • Solar panels
  • Wind turbines
  • Micro combined heat and power
  • Hydro
  • Anaerobic digestion

Your installation must have a maximum capacity of 5 MW – which is far higher than any domestic property should require – unless it’s a micro combined heat and power installation, in which case the upper limit is 50 kW.

You must provide your Microgeneration Certification Scheme (MCS) certificate, or an equivalent document.

If you don’t have this kind of certificate, make sure that your installation and installer are certified. Ask your chosen SEG company what information you need to provide.

You must also have an export meter – that is, a meter that’s capable of measuring your exported electricity.

If you have a smart meter, that automatically qualifies. If not, check that your meter is eligible with your SEG supplier, as most will require you to have a smart meter before you receive payments.

You’ll also need to give your SEG company your export MPAN – a 13-number reference that your supplier can use to identify your electricity connection point.

If you’re unsure about where you can find the export MPAN, just ask your supplier.

This list may seem intimidating, but it’s simple, we promise. Just contact your chosen supplier, follow their requirements, fill in their application form, and you’ll be accepting SEG payments in no time.

Do you need a smart meter in order to receive SEG payments?

Some suppliers do require you to have a smart meter in order to receive SEG payments.

Having one will also ensure you’re paid accurately for the energy you export, and will mean you don’t have to take manual readings – plus it may soon become compulsory.

What is the difference between the Feed-in Tariff and the Smart Export Guarantee?

The Smart Export Guarantee is an export tariff that suppliers pay you for the renewable energy you send to the Grid. The Feed-in Tariff offered this as well – but it also compelled suppliers to pay a generation tariff.

That means FiT recipients were paid for all the renewable power they produced, as well as receiving export payments for the green energy they sent to the Grid.

In the FiT era, the export tariff was paid on the assumption that households would export 50% of the renewable energy they generated, and it was paid on a standard rate.

In these SEG times, you’ll receive a different rate depending on which supplier you choose, and you'll be paid based on the amount of electricity you actually export, rather than an assumed 50%.

The other main difference between the two is that the FiT was funded by a tax on all consumers’ energy bills, while the SEG is paid for by suppliers.

What happens if you’re already earning FiT payments?

You can continue receiving generation tariff income regardless of whether you’re on an SEG tariff or not, but you can’t get both FiT and SEG export payments.

Though the FiT ended in March 2019, customers who signed up before that date can still receive payments for the duration of their contract, which is usually 20 years.

Once every 12 months, you can switch from your FiT export tariff to the SEG – but we only recommend taking this step if you’re sure it will lead to higher payments.

Next steps

Armed with this knowledge, you’re fully prepared to generate your own solar power and make money while doing it.

All you need to do now is to choose an SEG supplier – and of course, get some solar panels installed.

With 65% of people telling our latest National Home Energy Survey they're willing to buy a house with solar panels, there's never been a better time.

Just fill in this form with a few details, and our expert suppliers will be in touch with free solar panel quotes.

josh jackman
Josh Jackman Senior Writer

Josh has written about eco-friendly home improvements and climate change for the past three years. His work has featured on the front page of the Financial Times; he’s been interviewed by BBC One; and he was the resident expert in BT’s smart home tech initiative.

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