What is the SEG scheme?

Understanding the Solar Export Guarantee Scheme: A Practical Guide

The Solar Export Guarantee Scheme (SEG) was Introduced as a replacement for the Feed-in Tariff (FiT) programme which ended in 2019. The SEG scheme is an essential part of the UK’s renewable energy landscape. It’s designed to encourage the uptake of solar power by allowing households and businesses to earn money from the surplus energy they generate. 

Research shows that being able to export energy back to the grid is a big factor when customers are lconsidering solar.  

This guide will delve into the specifics of the scheme, including its history, eligibility criteria, and the potential earnings one can expect. By understanding the workings of the SEG, you can make informed decisions about harnessing solar energy and contributing to a more sustainable future.

Introduction to the Solar Export Guarantee

What is the SEG?

The Solar Export Guarantee (SEG) is a scheme lets homeowners and businesses with solar panels to earn money by exporting surplus electricity back to the national grid. 

The scheme was introduced to replace the previous Feed-in Tariff (FiT) programme. It aims to encourage solar energy use. 

Under the SEG, energy suppliers with over 150,000 customers are required to provide a tariff for the surplus energy, allowing solar panel owners to receive payments per unit of electricity exported.

The SEG aims to incentivise the uptake of renewable energy to reduce the reliance on non-renewable sources renewable electricity, and promote sustainability.

It is a vital part of the UK’s commitment to reducing carbon emissions and transitioning to cleaner energy sources. 

By participating in the SEG, individuals and businesses can contribute to environmental sustainability while benefiting financially from their investment in solar technology.

Brief History of Solar Incentives

The journey of solar incentives began with the Feed-in Tariff (FiT) programme in 2010. The FiT was designed to encourage the adoption of renewable energy by financially rewarding solar panel owners for generating electricity. 

It provided payments for both the energy consumed on-site and the surplus exported back to the grid. However, the scheme was eventually closed to new applicants in 2019 due to its high cost. 

The Solar Export Guarantee (SEG) was introduced as its successor.  While the FiT offered fixed payments, the SEG allows energy companies to set their own tariffs, encouraging consumer choice and potentially better rates. 

Transition from FiT to SEG

The FiT was effective in boosting solar panel installations by guaranteeing fixed payments for both generated and exported electricity. However, as solar technology became more affordable and widespread, the programme’s costs became unsustainable.

Consequently, the FiT closed to new applicants in March 2019. The SEG was launched in January 2020 to replace it, aiming to sustain momentum in solar energy adoption while addressing financial concerns. 

Unlike the FiT, the SEG does not provide fixed rates. Instead, it requires energy suppliers to offer a tariff for surplus electricity fed back to the grid. This encourages a competitive market environment, potentially leading to better rates for consumers. 

Eligibility for the Solar Export Guarantee

Who Can Qualify?

To qualify for the Solar Export Guarantee (SEG), individuals and businesses must meet specific criteria. Primarily, applicants need to have a renewable energy installation, such as solar panels, with a capacity of up to 5 megawatts (MW). 

This makes the SEG accessible to most homeowners and small to medium-sized enterprises. The installation must be registered with the Microgeneration Certification Scheme (MCS) or an equivalent certification scheme to ensure it meets technical standards. 

Additionally, the exported electricity must be metered by an approved export meter, which accurately records the amount of surplus energy sent back to the grid. It’s essential to check whether your energy supplier supports the SEG, as only suppliers with over 150,000 customers can offer it.

Installation Requirements

Firstly your solar panel system must be installed by an accredited installer under the Microgeneration Certification Scheme (MCS) or an equivalent scheme. 

This certification ensures that your installation meets high standards of quality and safety. The system should have a maximum capacity of up to 5 megawatts (MW), making it suitable for residential and small business installations. 

Additionally, an approved export meter is necessary to measure the amount of electricity you export back to the national grid accurately. This meter must meet the standards set out by the Office of Gas and Electricity Markets (Ofgem). 

Approved Energy Suppliers

To take advantage of the Solar Export Guarantee (SEG), you must use an approved energy supplier.When selecting a supplier, it’s important to compare the smart export guarantee tariff with rates they offer, as these can vary significantly.

Some suppliers might offer fixed rates, while others could provide variable ones, influenced by market conditions. Additionally, consider the contract terms and conditions, such as duration and any associated fees. 

Financial Benefits of the SEG

Earning Money Through Solar

Participating in the Solar Export Guarantee (SEG) offers a practical way to earn money by exporting unused solar energy back to the grid. The income you generate depends on the export tariff offered by your chosen energy supplier, which can vary based on market conditions and supplier policies.

 Typically, payments are made per kilowatt-hour (kWh) of electricity exported, providing a tangible return on your solar investment. 

While the rates may not be as high as under the former Feed-in Tariff (FiT) scheme, the SEG still presents a valuable opportunity to offset energy costs. 

Additionally, by generating your own electricity, you can reduce your reliance on the grid, lowering your energy bills. This dual benefit combined heat and power of saving on consumption and earning from exports makes solar energy an attractive option.

Calculating Expected Returns

To calculate your expected returns under the Solar Export Guarantee (SEG) you need to do the following. First, check the amount of electricity your solar panel system generates and estimate how much of this energy is surplus and how much electricity that can be exported back to the grid. 

This will typically depend on your household or business electricity consumption patterns. Next, review the export tariff offered by your energy supplier, which is usually specified in pence per kilowatt-hour (kWh). 

Multiply your estimated export volume by the tariff rate to project your potential earnings. Keep in mind that tariffs can vary among suppliers, so it’s beneficial to shop around for the best rates.

Additionally, consider any associated costs, such as maintenance and metering, which could affect your net earnings. Regularly reviewing your energy usage and supplier tariffs ensures you maximise your returns. 

Impact on Household Energy Bills

By installing solar panels, you generate your own electricity, reducing the amount you need to draw from the grid. 

This can lead to substantial savings, particularly during peak sunlight hours when energy generation is at its highest. 

Furthermore, any surplus electricity exported to the grid earns you additional income through the SEG tariffs, further offsetting your energy expenses. 

It’s worth noting that the extent of savings and income depends on your energy consumption habits, the capacity of your solar installation, and the export tariff rate. 

Households with higher consumption during daylight hours benefit most, as they utilise more of the self-generated energy. Regularly assessing your energy usage patterns and exploring competitive SEG offer export tariffs, can enhance these benefits. 

Overall, the SEG offers a dual financial advantage—lower bills and additional earnings—making it a compelling choice for households aiming for sustainability and cost efficiency.

Application Process for the SEG

How to Apply

Start by selecting an energy supplier that offers an SEG tariff. It’s important to compare different suppliers, considering not just the rates but also the terms and conditions. 

To sign up, you will need to provide specific information, including details of your solar installation  its capacity, proof of certification under the Microgeneration Certification Scheme (MCS) or an equivalent.

Additionally, you’ll need an approved export meter installed to measure the surplus energy you export. The supplier may require you to complete an application form, either online or via post. 

After submission, your application will be reviewed, and once accepted, you’ll start receiving payments for your exported energy.

Comparing SEG and FiT Schemes

Key Differences in Structure

The FiT  offered fixed rates for both generated and exported electricity, providing predictable income streams for solar panel owners. 

Payments were guaranteed for up to 20 years, offering long-term financial stability. In contrast, the SEG, introduced in 2020, requires energy suppliers to offer a tariff for surplus electricity exported back to the grid. 

Unlike FiT’s fixed rates, SEG tariffs are set by individual suppliers, fostering a competitive market environment. This means the rates can fluctuate based on market conditions, offering potentially better deals for consumers but also less predictability. 

While the FiT supported both generation and export, the SEG focuses solely on the latter, leaving users to benefit directly from self-consumed energy savings. These structural changes reflect a shift towards a more market-driven approach in promoting solar energy adoption.

Advantages of the SEG


The Solar Export Guarantee (SEG) scheme offers several advantages. One key benefit is its ability to foster competition among energy suppliers. By allowing suppliers to set their own smart export guarantee tariffs, consumers have the opportunity to shop around for the best rates. 

The focus on exporting surplus energy means households and businesses can maximise their self-consumption savings, as they can use their generated electricity directly. This not only reduces reliance on the national grid but also enhances energy independence.

Lessons from the FiT Experience

The experience with the Feed-in Tariff (FiT) scheme provided several valuable lessons that have shaped the Solar Export Guarantee (SEG). The FiT kick-started the adoption of solar technology in the UK by offering guaranteed payments for both generated and exported energy.

However, its fixed-rate structure led to high long-term costs for the government and ultimately became unsustainable as solar technology matured and costs decreased. 

This highlighted the need for a more flexible, market-driven approach. The FiT also underscored the importance of consumer engagement and the need for transparency in tariff rates. 

Additionally, the FiT’s long-term payment guarantees highlighted the benefits of stability for consumers, something that the SEG attempts to balance with competitive market rates. 

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