The Smart Export Guarantee (SEG) was introduced on 1st January 2020 as a replacement to the Feed-in Tariff (FiT).
Under the scheme, energy suppliers pay domestic solar panel owners for each unit of electricity their panels generate and contribute to the National Grid.
How does the Smart Export Guarantee work?
UK energy suppliers with more than 150,000 customers have a legal obligation to pay any customers for each unit of electricity generated by their solar panels. Any energy suppliers with fewer than 150,000 customers can take part in the scheme but are not obliged to do so.
In terms of the solar PV system itself, it must be a domestic installation of 5MW or below.
What was the Feed-in Tariff?
In April 2010, the FiT was introduced as an incentive to encourage more homeowners across the UK to invest in a solar PV system. The Feed-in Tariff was split into 2 parts:
- Generation tariff: Energy being generated by the solar panels.
- Export tariff: Unused energy that was exported to the National Grid
The payments were based on national tariffs which were re-evaluated every 3 months which, more often than not, saw the amount homeowners would receive reduced. When the scheme was first introduced, the rate stood at 43.3p per kWh but by the time of its closure was only at 3.79p per kWh.
The Feed-in Tariff was then closed to new applicants on 31st March 2019. Initially, there was no indication that a replacement scheme would be introduced but on 10th June 2019 the government confirmed the Smart Export Guarantee would begin from 1st January 2020.
What’s the difference between the FiT and the Smart Export Guarantee?
The Smart Export Guarantee works very differently to the Feed-in Tariff, the key differences being:
- Energy suppliers will be able to set their own tariffs whereas the FiT set the same tariff for all.
- Homeowners must have a smart meter to measure their exported electricity whereas under the FiT involved estimations.
- Payments will only be made for exported energy whereas the FiT also paid for units of electricity generated.
- Solar panel systems with a solar battery will be eligible under SEG where they were not eligible for the FiT.
One thing that the 2 schemes do have in common is that the solar panel system must be accredited by the Microgeneration Certification Scheme (MCS) or a suitable equivalent such as Flexi-orb.
Potential earnings through the Smart Export Guarantee
Energy suppliers can offer any tariff they like, as long as it is more than zero. They pay customers for generating their own renewable energy using solar panels, so potential payback depends on how much unused energy is sent to the National Grid.
Speaking about the Smart Export Guarantee, Chris Skidmore, the government’s stand-in energy minister said: “We want the energy market to innovate and it’s encouraging to see some suppliers already offering competitive export tariffs to reduce bills. We want more to follow suit, encouraging small-scale generation without adding to consumer bills, as we move towards a subsidy-free energy system and a net zero emissions economy.”
The Solar Trade Association (STA) also commented on the scheme: “We believe the Government should protect solar households by ensuring a fair minimum floor price so you cannot be exploited. In our view a fair average price is between 5p and 6p/kWh, though we recognise that power will be worth more or less than that at different times of the day and night.”
Can I apply if I receive FiT payments?
The Smart Export Guarantee is only open to new adopters of solar PV panels so if you’re still receiving FiT payment you can’t benefit from this scheme as well.
Will my FiT payments be affected?
The introduction of the Smart Export Guarantee will have no impact on any homeowners still receiving Feed-in Tariff payments. You will still receive those payments for the full 20 year period (or 25 years in a few cases).
Should I install solar panels?
By installing solar panels on your roof, you could:
- Reduce your reliance on your energy supplier which will in turn help to cut your energy bills
- Benefit from solar panels being at their cheapest price since 2010 with systems available for £6,000 – £7,000
- Lower the carbon footprint of your home by powering appliances with renewable solar energy
- Potential to increase the value of your property
Free solar panel installation quotes
When beginning your search for a qualified solar panel installer, we highly recommend comparing multiple quotes. This way, you can be confident that you’re getting the very best price for solar panel installations in your local area.
At Solar Guide, finding multiple quotes has never been easier. Simply complete an online form – providing details of the installation – and you’ll soon get free quotes from up to 3 fully-qualified MCS installers.