A SEG export tariff is a payment tariff offered by an electricity supplier for eligible low-carbon electricity exported back to the National Grid.
SEG stands for Smart Export Guarantee. Ofgem explains that the SEG enables small-scale generators to receive payments from electricity suppliers for electricity exported back to the National Grid, where certain criteria are met.
How a SEG export tariff works
If your solar panels or another eligible low-carbon system generate more electricity than you use, the surplus can be exported to the grid. A SEG tariff pays you for that exported electricity.
GOV.UK explains that under the Smart Export Guarantee you are paid for each unit of electricity you feed back to the grid, but not for electricity you use yourself.
export income =
exported kWh × SEG export tariff rate
For example, if you export 1,000kWh in a year at 15p per kWh, export income would be £150 before any supplier-specific terms or adjustments.
SEG pays for export, not total generation
A common mistake is assuming the SEG pays for every kWh generated by solar panels. It does not. It pays for eligible exported electricity.
| Electricity type | What happens | Financial effect |
|---|---|---|
| Self-used solar | Used in the home. | Can reduce imported electricity cost. |
| Exported solar | Sent to the grid. | Can earn SEG export income. |
| Imported electricity | Bought from the supplier. | Charged at your import unit rate. |
Who sets the SEG export rate?
SEG licensees set their own export tariff rates, contract length and other terms. Ofgem says the tariff rate must always be above zero.
This means rates can differ between suppliers. Some suppliers may offer different rates depending on whether you also import electricity from them, whether you have a battery, whether your system is certified, or whether you use a smart meter.
Who can use SEG?
Ofgem guidance says the SEG requires licensed electricity suppliers to offer export tariffs to eligible small-scale low-carbon generators, including solar photovoltaic systems up to 5MW and micro-combined heat and power up to 50kW.
For most homeowners, the relevant example is a domestic solar PV system. Eligibility can depend on installation standards, metering, supplier requirements and application evidence.
Check supplier rules before assuming income
SEG eligibility and payment setup can depend on supplier terms, metering, certification and application evidence.
SEG and smart meters
Export payments normally need export readings, so metering matters. Some homes use a smart meter capable of recording exports, while others may need different arrangements depending on supplier rules.
Before choosing a tariff, check how export readings will be measured, whether the supplier needs half-hourly readings and whether your meter is already configured correctly.
How SEG affects solar payback
A SEG export tariff can improve the solar payback period because exported electricity creates income. But self-used solar can be more valuable if your import electricity unit rate is higher than the export rate.
annual solar benefit =
self-used solar kWh × import unit rate
+ exported solar kWh × SEG export tariff
- annual maintenance
This is why payback calculations should separate self-used electricity from exported electricity instead of giving every solar kWh the same value.
SEG, batteries and self-consumption
A battery can reduce exported electricity by storing solar power for later use. This may increase self-consumption, but it can also reduce SEG income.
Whether a battery improves overall payback depends on the battery cost, import rate, export rate, storage losses, usage pattern and available smart tariffs.
SEG vs Feed-in Tariff
The Smart Export Guarantee is not the same as the old Feed-in Tariff scheme. The Feed-in Tariff closed to new applicants in 2019, while SEG focuses on payment for exported electricity from eligible systems.
If you already receive older scheme payments, check your own agreement before switching export arrangements because rules can be specific to your setup.
What to check before choosing a SEG tariff
- Export rate in pence per kWh.
- Whether the rate is fixed or variable.
- Whether you must also buy electricity from the same supplier.
- Contract length and notice period.
- Metering and export reading requirements.
- Whether battery exports are treated differently.
- Certification and application evidence required.
- How payments are made and how often.
Common SEG mistakes
- Assuming the highest export rate is always best without checking import rates.
- Counting self-used electricity as export income.
- Ignoring meter and certification requirements.
- Using an old tariff rate in a solar payback calculation.
- Assuming all suppliers offer the same SEG rate.
- Forgetting that supplier terms can change.
- Not separating battery, solar and export assumptions.
FAQs
What is a SEG export tariff?
A SEG export tariff pays eligible small-scale generators for electricity exported back to the grid.
Does SEG pay for electricity I use myself?
No. SEG pays for eligible exported electricity, while self-used solar saves money by reducing imported electricity.
Are all SEG rates the same?
No. Suppliers can set different export tariff rates and terms, but the rate must be above zero.
Does SEG affect solar payback?
Yes. Export income can shorten solar payback, but the effect depends on exported kWh and the export tariff rate.