The Smart Export Guarantee: Explained
Karl Wallis
Why you can trust us For a quarter century, our team has designed, sold and installed high-performing solar, battery and EV charging systems for UK households from Cornwall to Caithness. We're MCS certified and members of the Renewable Energy Consumer Code. Sstatistics come from Ofgem, DESNZ or our live database of more than 4,700 domestic arrays. In short, we've seen the good, the bad and the ugly - and we're here to share the truth in plain English.
At a glance
• SEG replaced the Feed-in Tariff in January 2020.
• Any licensed supplier with 150,000+ customers must pay you for exported solar electricity.
• The best bundled export rates now top 27 p/kWh; dynamic half-hour prices have spiked above 40 p.
• Sign‑up takes 6 to 12 weeks, requires a smart meter and an MCS certificate.
• A typical 4 kW solar + 10 kWh battery system earns £250‑£450 a year in SEG income, on top of bill savings.
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Contents
1. The Smart Export Guarantee in a nutshell
2. A brief history of UK export support
3. How the SEG works: flow of power and money
4. Fixed, variable and dynamic tariffs explained
5. Bundled vs unbundled: which suits you?
6. Real-world earning scenarios & payback maths
7. The bigger picture: environmental and grid benefits
8. Pros and cons table
9. Eligibility checklist - and how to tick every box
10. Installation & sign-up timeline, week by week
11. Maximising income: batteries, automation and time‑of‑use hacks
12. SEG vs virtual power plants, peer-to-peer and wholesale trading
13. Looking ahead: what 2026‑2035 may bring
14. Frequently asked questions (expanded)
15. Five myths busted
16. Next steps & free consultation offer
1 | The Smart Export Guarantee in a nutshell
The Smart Export Guarantee - usually shortened to SEG - is the UK's legal framework that forces medium and large energy suppliers to pay small-scale renewable generators for every kilowatt‑hour they push onto the public grid. It applies to solar PV, wind, hydro, anaerobic digestion and micro‑combined‑heat‑and‑power systems up to 5 MW. In practice, 99 % of sign-ups are solar homes.
When you hear talk of an "export tariff", that's the commercial wrapper around SEG: a contract between you (the generator) and a licensed supplier. The supplier sets the rate - it can be anything above zero - and decides whether to offer it to everyone (unbundled) or only to customers who also import power from them (bundled).
2 | A brief history of UK export support
• 2010 - Feed-in Tariff (FIT) launched: paid a generous generation rate plus a deemed export element.
• 2014‑18 - Fit degression slashed payments; boom slowed.
• March 2019 - Fit closed to new applicants, creating a policy vacuum.
• January 2020 - SEG went live; suppliers scrambled to launch fledgling tariffs at 3‑5 p/kWh.
• 2022 energy crisis - Wholesale prices exploded, dragging export rates upward.
• 2023‑24 - Competitive frenzy: 42 live tariffs, premium bundles top 25 p, dynamic products appear.
• April 2025 - New Ofgem rules tighten reporting; first voluntary licensee withdraws after low uptake.
Today, the SEG is mature, well-regulated and - crucially - lucrative enough to shave years off a system's payback.
3 | How the SEG works: flow of power and money
Imagine a bright June afternoon. Your 16-panel array is humming:
1. Generation - Panels convert sunlight into DC, inverter flips it to AC.
2. Self‑consumption - Fridge, washing machine and heat‑pump guzzle what they need.
3. Surplus - Battery is already 90 % full; excess heads out through the smart meter.
4. Measurement - Smart meter logs export every 30 minutes and ping data to the supplier via the DCC network.
5. Revenue - At month‑end, the supplier multiplies exported kWh by the agreed rate and credits your energy account or bank.
Behind the scenes, Ofgem audits the figures, suppliers report quarterly statistics, and Westminster reviews the policy annually. For you, it's nearly invisible - the money arrives automatically.
4 | Fixed, variable and dynamic tariffs explained
• Fixed export tariff - Same p/kWh all day, all contract. Simple budgeting; downside is you miss those juicy evening peaks.
• Variable export tariff - Supplier can change the rate with notice (usually quarterly). Your payments track market moves, but you keep time-of-day simplicity.
• Dynamic half-hour tariff - Pegged to wholesale prices like Octopus Outgoing Agile or E.ON Next Dynamic. At 2 pm, you might get 7 p; at 6 pm, you could earn 40 p. Perfect for battery owners who can hold energy until demand surges.
Choosing the right structure is half the battle, especially if you plan to automate exports in response to pricing signals.
5 | Bundled vs unbundled: which suits you?
Factor Bundled tariff Unbundled tariff
Need to switch the import supply? Usually Never
Average export rate 2024‑25 13.8 p 4.5 p
Best‑in‑class peak 27 p 12 p
Contract lock‑in 12‑18 m 0‑12 m
Exit fee risk Moderate Low
Ideal for... New buyers chasing the fastest ROI Fit veterans tied to long import deals.
Our customer data shows 78 % select a bundled product within the first year post-install because the triple-digit percentage premium dwarfs any hassle of switching suppliers.
Ready to Power Your Future with Solar?
Join hundreds of UK homeowners and businesses already saving with GRW Solar.
Enjoy cleaner energy, lower bills, and expert support every step of the way.
Call us free on 0800 059 0606
Email:
enquires@grwsolar.co.uk
Visit grwsolar.co.uk to get your free quote today
6 | Real‑world earning scenarios & payback maths
Scenario 1 - Young family, Birmingham, 3.2 kW solar, no battery
• Generation: 2,900 kWh
• Home use: 45 %
• Export: 1,595 kWh
Export tariff Rate Annual income
Unbundled fixed 4.5 p £72
Bundled fixed 12.5 p £199
Dynamic average (battery‑less) 14 p £223
Take‑home - Even without a battery, the family triples revenue by choosing a bundled deal. Cumulative SEG income over 20 years: £ 3,800‑£ 4,400.
Scenario 2 - Remote worker couple, Bristol, 5 kW solar + 10 kWh battery + EV
• Generation: 4,700 kWh
• Home use & EV: 65 %
• Export: 1,645 kWh
Export tariff Rate Annual income
Unbundled fixed 4.5 p £74
Bundled fixed 14 p £230
Dynamic battery‑optimised 27 p £444
Take‑home - Battery + dynamic rate almost sextuples export income versus basic unbundled. Full system ROI plummets from 8.4 years to 5.9 years.
(All calculations assume 0.4 % panel degradation and no future rate increases. In reality, wholesale spikes could boost earnings further.)
7 | The bigger picture: environmental and grid benefits
Every kilowatt you export under the Smart Export Guarantee displaces generation from fossil gas or imported interconnectors. DESNZ data shows 2024 SEG exports shaved 320,000 t of CO₂e - the equivalent of planting 15 million trees.
But the grid benefits too:
• Voltage support - Dispersed rooftop arrays reduce transformer stress in sunny midday hours.
• Peak‑shaving - Evening battery exports delay costly peaker plants.
• Transmission deferral - Local generation means National Grid can postpone billion-pound cable upgrades.
Put simply, SEG payments aren't just a homeowner perk - they're a linchpin of Britain's decentralised energy future.
8 | Pros and cons at a glance
Pros: Cons
Financial Tax-free* revenue, faster payback, hedge against wholesale volatility: Rates vary; some fixed bundles carry exit fees.
Technical Works with or without battery, compatible with Fit generation: Requires a smart meter; export curtailed if DNO grid limits are reached.
Environmental Cuts CO₂, supports grid flexibility, Zero generation rate (unlike old FIT)
Practical: Multiple suppliers compete; easy to switch annually. Admin can take up to three months from install to first payment.
*HMRC treats SEG earnings as tax-exempt for domestic arrays under 50 kW (2025 policy).
9 | Eligibility checklist - and how to tick every box
1. MCS or Flexi‑Orb certificate - We supply this on installation day.
2. Smart meter (SMETS2 preferable) - Arrange via your import supplier; installation is free.
3. Export MPAN - We or your supplier requests this from the Distribution Network Operator (DNO).
4. System capacity ≤ 5 MW (50 kW for micro‑CHP) - Every domestic array qualifies.
5. Bank account & proof of ownership - Utility bill or Land Registry deed.
Tick all five and you're good to sign a contract.
10 | Installation & sign‑up timeline, week by week
Week 0 - Home survey, roof design, DNO G98 application filed.
Week 2 - Scaffolding erected; installation takes 1‑- 2 days.
Week 3 - Commissioning: inverter, battery, EV charger tested; homeowner handover pack delivered.
Week 4 - Smart meter appointment if not already installed.
Week 5 - SEG tariff chosen; application sent with MCS certificate and photos.
Week 7 - Supplier issues provisional acceptance; export MPAN allocated.
Week 8‑10 - First half‑hour export reads flow; payments accrue from the application date.
Week 12 - First credit lands; you toast the sun with your favourite brew.
11 | Maximising income: batteries, automation and time‑of‑use hacks
1. Right‑size your battery - Aim for 2.5‑3 kWh of storage per installed kW of solar. Too small and you'll spill precious energy at low midday prices.
2. Automate discharge windows - Platforms like Giv‑TCP, Home Assistant, or Octopus' API let you schedule battery export exactly when dynamic rates spike. Typical uplift: +40‑60 % revenue.
3. Stack benefits - Charge battery overnight on a cheap import tariff (e.g., Octopus Go at 7.5 p) then export at 30 p. Arbitrage isn't for everyone but yields tasty margins if managed carefully.
4. Smart EV charging - Defer car charging to low-price windows; free up daytime solar to export instead.
5. Heat‑pump synergy - Pre‑heat your hot‑water cylinder mid-morning so evening surplus is freed to hit peak rates.
12 | SEG vs virtual power plants, peer‑to‑peer and wholesale trading
Feature SEG VPP (e.g., Octopus PowerPack) Peer‑to‑peer (pilot)
Legal framework, Ofgem licence condition, Commercial contract, Sandbox scheme
Needs battery? No Yes No (varies)
Control of assets. You, Operator, can discharge the battery Shared algorithm.
Revenue model p/kWh export, Profit share from flexibility markets, Direct sale to neighbour
Typical income uplift vs SEG n/a +10‑30 % Unknown
Take‑home - SEG is the baseline. VPPS can add cream if you're comfortable relinquishing some control. Peer-to-peer is promising but still in regulatory infancy.
13 | Looking ahead: what 2026‑2035 may bring
• Mandatory dynamic tariffs - Ofgem consultation hints that by 2027, all medium suppliers must offer a dynamic export option.
• Higher battery‑penetration premiums - Expect suppliers to pay a bonus for verified storage that can support grid services on demand.
• Regional adjustment factors - National Grid's nodal pricing trial could mean higher rates in constrained zones (Cornwall, Sussex) and lower rates in surplus areas (Scottish Highlands).
• Carbon-indexed bonuses - Green certificates for time-matched renewables may add 1.2 p/kWh by 2030.
• Domestic ancillary markets - Home batteries could earn extra revenue via frequency response without sacrificing SEG revenue.
Bottom line: early adopters already win, and policy momentum points to richer rewards ahead.
14 | Frequently asked questions (expanded)
Q. Who currently pays the highest Smart Export Guarantee rate?
A. Octopus Outgoing Agile often hits 40 per cent in winter peaks. For a flat rate, the crown goes to Good Energy's 15 p SmartGen+.
Q. Is SEG income guaranteed to stay high?
No tariff is forever, but wholesale forecasts by Cornwall Insight show elevated prices through the late 2030s. Competition between suppliers also limits downside risk.
Q. Can I combine SEG with the Boiler Upgrade Scheme or ECO4?
Yes. SEG doesn't clash with other UK home‑energy grants because it's a commercial payment, not a subsidy.
Q. What if my DNO curtails export?
Rare on single-phase domestic supplies, but if your area is saturated, the DNO may cap exports at 3.68 kW. A smart battery can still earn by time‑shifting within that cap.
Q. Do I pay VAT on SEG earnings?
No VAT is charged on export payments. Domestic SEG is treated like a rebate.
Q. Will SEG disappear like the Fit?
Highly unlikely. It's embedded in supplier licence conditions rather than funded by Treasury budget, so it doesn't rely on political will or levies.
15 | Five myths busted
1. "You need a massive roof to benefit."
False - a modest 2 kW array still exports enough to earn £90‑£120 a year.
2. "Export prices only matter if you have no battery."
Wrong - batteries amplify revenue by letting you target peak prices.
3. "SEG payments are complicated to claim."
Once set up, they're completely automatic. The biggest hurdle is emailing your MCS certificate - a one-off.
4. "Switching SEG provider is a nightmare."
The Energy Switch Guarantee covers export deals too. Most transfers complete in 15 days without supply disruption.
5. "SEG will be taxed eventually."
HMRC has repeatedly confirmed that domestic microgeneration is outside income tax. Changing that would disincentivise Net Zero - politically toxic.
16 | Ready to monetise your sunshine?
Whether you're considering your first panel or already eyeing a second battery, the Smart Export Guarantee is your ticket to turning daylight into a durable revenue stream. Here's how we help:
1. Free video or in-home survey - 30 minutes with a senior consultant, not a hard‑sell call‑centre rep.
2. Tailored energy model - We simulate your roof's hourly generation and match it to live export tariffs.
3. Transparent quote - Fixed installation price, performance warranty, after-sales care.
4. Switch‑assist service - We handle your smart‑meter booking and SEG paperwork at no extra cost.
5. Ongoing optimisation - Annual health check plus free tariff‑watch alerts so you never miss a better rate.
Act now - panel supply chains are tight ahead of summer, and the zero‑VAT window closes in 2027. Book your slot today, lock in an industry-leading export tariff, and let the sun start paying your energy bills.
Ready to Power Your Future with Solar?
Join hundreds of UK homeowners and businesses already saving with GRW Solar.
Enjoy cleaner energy, lower bills, and expert support every step of the way.
Call us free on 0800 059 0606
Email:
enquires@grwsolar.co.uk
Visit grwsolar.co.uk to get your free quote today
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