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The UK government has introduced the Smart Export Guarantee (SEG) as a new subsidy scheme for renewable energy exports. This initiative allows homeowners and businesses to earn money by selling excess electricity generated from renewable sources back to the grid.
Since the installation of the first 30kWp solar photovoltaic (PV) system by BP Solar in 1984, solar power generation in the UK has a history of nearly 40 years. Prior to the introduction of the Feed-in Tariffs (FiTs) incentive scheme in 2010, solar PV installations in the UK were relatively small, with a cumulative capacity of approximately 36MWp. To encourage the adoption of solar PV systems, the UK government has implemented two major incentive schemes: Feed-in Tariffs (April 2010 – March 2019) and Smart Export Guarantee (January 2020 – present).
Feed-in Tariffs
The Feed-in Tariffs scheme, implemented in April 2010, provided incentives for rooftop solar PV installations with a capacity of less than 5MW. Under this scheme, users were rewarded for both the electricity generated and the surplus electricity exported to the grid. The duration of the incentive was 25 years for applications submitted before August 2012 and 20 years thereafter.
The incentive scheme under Feed-in Tariffs consisted of three main components: generation tariff, export tariff, and savings on electricity bills. The generation tariff rewarded users based on their electricity generation, while the export tariff was based on the amount of surplus electricity exported to the grid. The savings on electricity bills were achieved by reducing the amount of electricity purchased from energy suppliers through the use of self-generated solar power.
The generation tariff varied each year within the subsidy period. For example, based on the incentive rates announced in August 2011, the annual subsidy for a solar PV project was as follows (in pence/kWh):
– 43.3 pence/kWh for systems up to 4kWp
– 37.8 pence/kWh for systems between 4kWp and 10kWp
– 32.9 pence/kWh for systems between 10kWp and 50kWp
– 19 pence/kWh for systems between 50kWp and 150kWp
The export tariff also varied over the years. From 2010 to 2019, the rates for surplus electricity exported to the grid were as follows:
– 3.1 pence/kWh (April 2010 – September 2010)
– 3.2 pence/kWh (October 2010 – March 2012)
– 4.5 pence/kWh (April 2012 – March 2013)
– 4.64 pence/kWh (April 2013 – March 2014)
– 4.77 pence/kWh (April 2014 – March 2015)
– 4.85 pence/kWh (April 2015 – March 2016)
– 4.91 pence/kWh (April 2016 – March 2017)
– 4.18 pence/kWh (April 2017 – March 2019)
In March 2019, the Feed-in Tariffs scheme came to an end. It was replaced by the Smart Export Guarantee (SEG), introduced by the Department for Business, Energy and Industrial Strategy (BEIS) in January 2020. Unlike the FiTs scheme, which provided subsidies for both electricity generation and surplus electricity exported, the SEG only offers subsidies for the electricity exported to the grid.
What is SEG (Smart Export Guarantee)?
The Smart Export Guarantee (SEG) is a government-backed initiative in the United Kingdom that encourages small-scale low-carbon electricity generation, such as solar panels or wind turbines, by providing financial incentives for exporting excess electricity back to the grid.
The SEG was introduced on January 1, 2020, to replace the earlier Feed-in Tariff (FiT) scheme, which was phased out. Under the SEG, eligible generators receive payments for the surplus electricity they export to the grid. These payments are typically made by energy suppliers and are intended to compensate individuals and businesses for the electricity they generate and contribute to the national grid.
The rates and terms of the Smart Export Guarantee vary depending on the energy supplier and can be either a fixed rate or based on market rates. The scheme aims to encourage the adoption of renewable energy technologies, support the growth of distributed energy generation, and help the UK transition to a more sustainable and low-carbon energy system.
Which technologies are eligible for the SEG?
The Smart Export Guarantee (SEG) encompasses five approved low-carbon technology types, making you eligible to participate if you have any of these installed:
- Solar photovoltaic (solar PV)
- Wind
- Micro combined heat and power (micro-CHP)
- Hydro
- Anaerobic digestion (AD)
For qualification under SEG, these installations must be situated in Great Britain and possess a total installed capacity (TIC) not exceeding 5MW, with a limit of 50kW for micro-CHP installations.
Who is eligible？
Eligibility for the Smart Export Guarantee (SEG) is generally open to small-scale low-carbon electricity generators in the United Kingdom. The scheme is designed for individuals, businesses, and organizations that generate renewable energy through technologies such as solar panels, wind turbines, hydroelectric generators, or other eligible forms of renewable energy.
Here are some key points regarding eligibility for SEG:
- Size of Installation: Typically, SEG is targeted at small-scale generators, and there may be limits on the size of the installation to qualify for the scheme.
- Renewable Energy Technologies: Eligibility is usually limited to those generating electricity from renewable energy sources, such as solar photovoltaic (PV) systems, wind turbines, hydroelectric generators, anaerobic digestion, and certain other low-carbon technologies.
- Metering: An eligible generator must have an export meter installed to accurately measure the amount of electricity exported to the grid.
- Grid Connection: The generator must be connected to the national electricity grid to export surplus electricity.
- Certification and Compliance: Compliance with relevant industry standards and certifications is often required to participate in the scheme.
- Licensed Supplier: The generator must be with a licensed energy supplier that offers the Smart Export Guarantee and is willing to make payments for the exported surplus electricity.
It’s important to note that specific eligibility criteria and requirements may vary based on the energy supplier or the terms of the SEG offered by different suppliers. Individuals and organizations interested in participating in the SEG should contact their chosen energy supplier for detailed information on eligibility, rates, and the application process.
SEG subsidy rates
Under the SEG, users are paid a subsidy based on the metered export data. The amount of subsidy is determined by individual energy suppliers, and different suppliers may offer varying rates. As of August 2023, the following 13 energy companies have announced their SEG subsidy rates, listed from highest to lowest:
– Octopus
– Scottish Power
– EDF Energy
– E.ON
– Shell Energy
– Bulb Energy
– SSE Energy
– Good Energy
– Green Network Energy
– Utilita Energy
– ESB Energy
– Green Star Energy
– British Gas
The Solar Energy UK website presents an updated compilation of ongoing solar energy deals.
It is important to note that customers have the freedom to choose any energy supplier offering SEG subsidies. Companies like Octopus, Scottish Power, EDF Energy, and E.ON offer relatively higher subsidy rates.
The SEG subsidies are tax-free, subject to certain conditions. This allows individuals and businesses to maximize their earnings from exporting renewable electricity.
Also check: UK Feed-in Tariffs and Smart Export Guarantee to Encourage Rooftop Photovoltaic Installation
How much can a family get from SEG?
The amount a family can receive through the Smart Export Guarantee (SEG) varies depending on several factors, including the energy supplier they choose, the size of their renewable energy system, and the rates offered by the supplier.
Under the SEG, energy suppliers offer payments to eligible generators for the surplus electricity they export to the grid. These payments can be in the form of a fixed rate per kilowatt-hour (kWh) or a variable rate based on market conditions.
The rates are set by the individual energy suppliers, so they can vary from one supplier to another. It’s advisable for families or individuals considering the SEG to research and compare the rates offered by different suppliers to determine which one offers the best financial incentive for exporting surplus electricity.
The payments received from the SEG can contribute to reducing the overall electricity bills for the family, making renewable energy investments more financially viable in the long run.
For specific and up-to-date information on the rates and payments available through the SEG, individuals should reach out to potential energy suppliers and inquire about their SEG offerings.
Can lithium battery buyers get benefit from SEG?
Yes, you can potentially benefit from the Smart Export Guarantee (SEG) if you install a lithium battery for energy storage along with your renewable energy system. The SEG primarily focuses on compensating individuals and organizations for exporting surplus electricity generated from renewable sources back to the grid. If you have excess energy that you store in a battery instead of exporting it immediately to the grid, you can use it at a later time when your renewable energy source is not generating enough power. (Check: What are the wholesale prices of lithium batteries at a true factory)
Here’s how it works:
- Generate Excess Electricity: When your renewable energy system (e.g., solar panels) generates more electricity than you need, the surplus is either exported to the grid or stored in your lithium battery.
- Store Excess Electricity: If you have a lithium battery system, you can store the excess electricity for later use instead of exporting it.
- Use Stored Electricity: When your renewable energy system is not generating enough power (e.g., at night or during cloudy days), you can use the stored electricity from the battery to power your home. This helps reduce your reliance on grid-supplied electricity during these times.
While the SEG primarily focuses on payments for exported surplus electricity, some energy suppliers may also offer additional benefits or incentives for energy storage systems like lithium batteries. These benefits could include higher payment rates, time-of-use tariffs, or specific tariffs for energy discharged from your battery during peak demand periods.
To fully understand the potential benefits and offerings related to energy storage and the SEG, it’s important to research and compare offerings from different energy suppliers, and consider reaching out to them directly to discuss your specific situation and requirements.
How to apply for the Smart Export Guarantee (SEG)?
To apply for the Smart Export Guarantee (SEG) and receive payments for the electricity you export to the National Grid, follow these steps:
- Identify SEG Licensees: Research and identify SEG licensees, which are electricity suppliers offering SEG tariffs. You can find a list of these suppliers on the Solar Energy UK website or through other reliable sources.
- Select an SEG Licensee: Choose an SEG licensee that suits your preferences and requirements. Ensure they offer terms and rates that align with your expectations.
- Visit the Licensee’s Website: Go to the chosen SEG licensee’s website to find details about their SEG tariff and the application process.
- Review Application Details: Read through the SEG application process provided on the licensee’s website. Understand the requirements, documentation, and any specific information needed for the application.
- Complete the Application: Fill out the application form provided by the SEG licensee accurately and completely. Submit any required documents or information as specified in the application process.
- Await Confirmation: Wait for the SEG licensee to process your application and provide confirmation of your acceptance into the SEG program.
- Receive SEG Payments: Once approved, you’ll start receiving payments for the electricity you export to the National Grid as per the terms outlined in the SEG tariff.
It’s important to note that details of SEG payments, including the amount due and contract length, will be determined by the SEG licensee you choose. Payments will be based on your actual meter readings, even if some suppliers offer alternative payment models. Additionally, ensure that the SEG tariff offered to you is always above zero. Your SEG licensee does not have to be the same company as your current energy supplier; you have the flexibility to choose separate companies for your SEG payments, electricity supply, and gas supply if desired.
Conclusion
The Smart Export Guarantee (SEG) presents a new opportunity for individuals and businesses in the UK to earn money by exporting surplus electricity generated from renewable sources. With a wide range of energy suppliers participating in the scheme, users have the flexibility to choose the best SEG subsidy rates for their renewable energy exports.
