What is the Smart Export Guarantee (SEG)?
The Smart Export Guarantee is a mechanism to pay people who generate small amounts of renewable energy for the electricity they export to the grid. It applies to people installing a renewable energy generating system using one of the following technologies:
- solar PV panels
- a domestic wind turbine
- anaerobic digestion
- micro combined heat and power
Following the closure of the Feed-in Tariff scheme to new applicants in March 2019, the government recognised the need to pay small-scale renewable energy generators for the electricity they export to the grid. So the Department for Business, Energy and Industrial Strategy (BEIS) is introducing the Smart Export Guarantee (SEG).
The Smart Export Guarantee will come into force from 1 January 2020.
Under the scheme, all licenced energy suppliers with 150,000 or more customers must provide at least one Smart Export Guarantee tariff. Smaller suppliers can offer a tariff if they want to. All suppliers can also choose to offer other means of making payments for exported electricity, separate to the SEG arrangements – see ‘Alternative finance arrangements’ below.
If you already receive a Feed-in Tariff on your installation, this will be unaffected by the launch of the Smart Export Guarantee.
Which renewable energy installations are eligible for SEG?
The following renewable energy installations are eligible for the smart export guarantee:
- Solar PV systems, onshore wind, anaerobic digestion, hydro – up to 5MW
- Micro-combined heat and power – with an electrical capacity of up to 50kW
Any typical business or domestic system would be well within these size limits.
The technology and installer used must be certified under the Microgeneration Certification Scheme (MCS) or equivalent. Energy suppliers may ask you to provide a MCS certificate to prove your installation meets this standard.
Exported power must be metered using a meter capable of reading exports on a half hourly basis, even if half hourly readings are not required for the tariff. Meters must also be registered for settlement.
Unlike the Feed-In Tariffs scheme, there will not be any requirement for properties to meet minimum energy efficiency standards.
How much will I receive for exporting electricity with SEG?
There are no set or minimum tariffs for the Smart Export Guarantee – the only requirement is that the tariff must be greater than zero at all times. In practice, this means that it is up to energy suppliers to decide what tariffs to offer their customers. They may choose to offer multiple tariffs or just one.
It is expected that the SEG tariffs will be quite straightforward to start with, probably paying a fixed rate per kWh of electricity exported. They may get more complicated over time. Ofgem will report on the tariffs available, as well as how many people are on them, each year.
As a clue to the likely rate of SEG tariffs, we can look at the export tariff in the final quarter of the Feed-In Tariffs scheme, which was 5.38 p/kWh. You can also see what offerings suppliers are already providing before the start of SEG under the ‘Alternative finance arrangements’ section below.
Can I combine SEG with other grants and financial support?
Yes. The only exception is if you already receive payments under the Feed-in Tariff scheme. You cannot receive both a Feed-in tariff and SEG payments, although you can choose to opt out of your Feed-in Tariff and receive SEG payments instead.
SEG payments are not linked to other financial support around renewable energy installations. This means, if eligible, you could combine SEG payments with other financial support offered by Energy Saving Trust such as the Home Energy Scotland loan for example.
You will not be able to receive SEG from more than one supplier.
SEG and energy storage
Some solar PV or wind turbine installations will have energy storage systems attached to them. In these cases, the battery could store electricity imported from the grid (known as brown electricity) before exporting it later on.
Energy suppliers do not have to pay you for brown electricity exported to the grid but they may choose to do so.
Some suppliers may only pay the SEG for green electricity i.e. the electricity your low-carbon system generates itself. If this is the case, the supplier may ask you to show how you separate out the green electricity you generate from any imported brown electricity. Speak to us about how to do this.
Alternative finance arrangements
Before SEG comes into force in January 2020, some energy suppliers are offering similar deals by paying customers set tariffs for electricity they export to the grid. Deals are specific to each business and household and could involve your generation and supply being metered. Deals may also be time limited and have other conditions which you should consider carefully in order to make the best choice for you.
The Solar Trade Association website lists the current deals available.
If you are based in Scotland and haven’t yet installed a renewable electricity technology such as solar PV, you may be able to apply for the interest-free Home Energy Scotland loan to help with the initial costs. To be eligible for the loan you must not start work on your system until you have received a written loan offer.
Read the policy documents about the Smart Export Guarantee
Feed-in Tariff scheme
The Feed-in Tariffs (FITs) scheme closed to new applications on 31 March 2019.
Under FITs, householders receive payments for the electricity generated by eligible installed systems like solar PV, wind or hydro turbines, or micro CHP.
Important information about FITs closure and future applications
- Businesses and householders that installed an eligible system and have already successfully applied for FITs payments are unaffected by the scheme closure.
- Businesses and householders that have installed an eligible system with an MCS certificate dated on or before 31 March 2019 have until 31 March 2020 to apply to the scheme.
- Householders that have not installed an eligible system on or before 31 March 2019 will not be eligible for FITs payments.
If you have installed an eligible system with an MCS certificate dated on or before 31 March 2019 and are considering applying for FITs payments before 31 March 2020, see the Energy Savings Trusts Feed-in Tariffs page for more information.
Further information on renewables and how we can help in turning your organisation’s green and net-zero ambitions into ACTION here.
To discuss your own business energy challenges, including commercial electric vehicle charging, talk to us now on 01752 26 26 26 or email firstname.lastname@example.org.