The Smart Export Guarantee 2022 Josh Jackman Last updated on 26th April 2022 11 minutes read ✔ 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 schemeHomeowners 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's on this page? 01 | What is the Smart Export Guarantee? 02 | Smart Export Guarantee rates 03 | How much money can you earn? 04 | How do you qualify and sign up? 05 | The Feed-in Tariff and the Smart Export Guarantee 06 | Next steps 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 rates16 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 four that have volunteered.Here are the best and worst SEG rates out there.Energy supplierPrice (p/kWh)Name of tariffTesla (requires Powerwall 2 battery)11Tesla Energy PlanOctopus Energy (own customers)7.5Outgoing FixedBulb (own customers)5.57Export PaymentsE.On (new E.On solar PV customers)5.5Next Export ExclusiveScottishPower5.5Smart Export Variable TariffPozitive Energy5SEG tariffSO Energy5So AltairOctopus Energy (non-customers)4.1Outgoing GoOVO4OVO SEG TariffSSE3.5Smart Export TariffShell Energy3.5SEG V1.1 TariffBritish Gas3.2Export & Earn FlexUtilita3Utilita Smart Export GuaranteeBulb (non-customers)3Export PaymentsE.On (all other customers)3Next ExportUtility Warehouse2UW Smart Export GuaranteeEDF1.5Export+EarnE1E SEG January2020v.1What’s the best Smart Export Guarantee rate?As you can see, Octopus offers the best SEG rate, 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.The Eco Experts asked EDF about this disparity. In response, an EDF spokesperson said: “We are currently in the process of reviewing our SEG prices and strategy and as such, not able to offer more detail at this time.”Is the Smart Export Guarantee good enough?The Smart Export Guarantee is a positive development, but goes nowhere near far enough to reward solar panel owners 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. How much money can you earn from the Smart Export Guarantee?The 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 average.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 systemThis table is an average look at the entire UK, which currently has a typical break-even time of nine years.As long as you buy the right size solar panel system for your home and pay a fair price (around £480 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£673 bedrooms103.5£1124+ bedrooms144.9£157SEG income based on location of solar panel systemLocation 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 evenSouth East England£1277.9South Wales£1248.1Midlands£1178.6North West England£1109.2North Scotland£8811.4If 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 nearbyYou 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 homeIf 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 panelsWind turbinesMicro combined heat and powerHydroAnaerobic digestionYour 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 accredited. 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, while in these SEG times, you’ll receive a different rate depending on which supplier you choose.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 stepsArmed 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.Just fill in this form with a few details, and our expert suppliers will be in touch with free solar panel quotes. Josh Jackman Senior Writer @josh_jackman 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 Radio; and he was the resident expert in BT’s smart home tech initiative.