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The Smart Export Guarantee pays households for surplus electricity sent back to the grid from solar panels. Here’s how it works, what you could earn and what to know before choosing a tariff
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The Smart Export Guarantee (SEG) is the scheme that pays households for any excess electricity they send back to the grid from small-scale renewable systems such as solar panels. For many homeowners, that means earning money from power they do not use themselves, especially on bright days when panels are generating more than the home needs.
It is not as generous or as simple as the old Feed-in Tariff it replaced. Rates are set by individual energy suppliers rather than the government, and they can vary significantly. Even so, the SEG remains an important part of the wider financial picture. If you are weighing up the cost of solar panels, comparing the best solar panels, or deciding whether solar panels worth it, export payments can help improve the long-term return alongside bill savings and lower installation costs.
While SEG earnings alone are unlikely to transform the economics of a system, they do provide a practical way to get more value from your solar investment. The key is understanding how the scheme works, which suppliers offer the best rates, and how much electricity your home is likely to export in the first place.
Use our comparison tool to get a range of free quotes from leading solar panel installers across the UK.
Launched in January 2020, the Smart Export Guarantee is a government‑backed scheme requiring medium and large energy suppliers to pay households for the renewable electricity they export to the grid. Ofgem regulates the scheme, but suppliers set their own tariff rates.
Crucially, the SEG pays only for exported electricity. There is no generation tariff, as there was under the Feed‑in Tariff. Instead, customers are paid per kilowatt-hour (kWh) of surplus energy that their property sends back to the grid via a smart meter.
To receive SEG payments, households must meet several technical and regulatory requirements designed to ensure that exported electricity is safe, measurable, and genuinely renewable.
In addition to the core criteria already outlined, homeowners should also be aware of the following considerations:
These requirements mean your documentation must be complete before applying. Missing or unclear MCS certificates are among the most common reasons for delayed approval.
To qualify for the SEG, you must meet the following requirements:
You do not need to buy your electricity from the same supplier that pays for your exports. Many households choose their SEG provider and electricity supplier separately to maximise overall value.
SEG tariffs are designed to be flexible, market‑driven products, which means different suppliers can – and often do – take very different approaches to pricing and contract design.
Beyond the basic distinction between fixed and variable tariffs, several additional factors influence how SEG payments work:
This market-led structure is meant to foster competition, although in practice it results in significant variation, making regular comparison a key strategy for maximising earnings. SEG tariffs fall broadly into two categories: fixed and variable.
Suppliers must pay above zero, but there is no minimum rate, and tariffs can change over time. Some suppliers offer higher export rates only to customers who also use them for electricity supply.
Export payments are typically made quarterly, and you’re free to switch SEG providers if you find a better rate.
Smart Export Guarantee rates change frequently, and suppliers are not required to offer competitive prices. Some suppliers pay as low as 1p/kWh, while others offer significantly more at around 15p/kWh. A handful of tariffs at these higher rates sit at the premium end of the market but often come with the condition that you also switch your electricity supply to that provider.
Because Smart Export Guarantee rates fluctuate, it’s important to check the latest tariff tables before applying. Households should also compare payment terms, contract conditions, and any customer‑only restrictions.
How much you earn depends heavily on your household’s energy profile. While system size and tariff rate matter, the biggest factor is often self-consumption, or the proportion of solar energy you use yourself before anything is exported.
Most homes export between 30 per cent and 60 per cent of their solar generation unless they have a battery. For a typical 3.5–4kW system, that often translates to roughly 1,200–2,000kWh exported each year.
Once you estimate your export volume, multiply it by the tariff rate:
Even though SEG payments are helpful, the majority of solar savings come from offsetting grid electricity, which is typically far more expensive than the SEG rate. Export income should therefore be considered the bonus that improves overall system payback rather than the main financial driver.
For households focused on return on investment, a balanced approach, maximising self-consumption while securing a fair export tariff — usually produces the best results. Earnings vary depending on several factors:
A typical 4kW solar system might generate around 3,400kWh per year. If a household uses around half of that energy in real time and exports the remaining 1,700kWh, then:
For most households, SEG income doesn’t make up the bulk of the financial benefit – bill savings do – but it provides a useful additional return and shortens the payback period for solar.
Applying for the SEG typically involves the following steps:
Approval times vary, but most applications are processed within a few weeks. Payments usually start from the date your application is accepted, not the date your panels were installed.
If you have a solar battery, SEG payments still apply, provided the exported electricity is generated renewably. Some suppliers require you to declare your storage setup to ensure that no energy imported from the grid is re-exported for profit.
Batteries can reduce your SEG earnings by storing energy you might otherwise export. However, they typically improve your overall savings by increasing your self‑consumption rate, which usually benefits your household more than exporting at a low tariff.
For most households with solar panels, yes, but it is best seen as a useful extra rather than the main reason to invest. The Smart Export Guarantee requires participating suppliers to pay eligible small-scale generators for electricity exported to the grid, and Ofgem says tariff rates must always be above zero, though suppliers can set their own prices and contract terms. That means SEG income can vary widely depending on who you sign up with and how much unused electricity your system exports.
In practice, SEG payments are unlikely to be large enough on their own to justify installing solar panels. The bigger financial benefit usually comes from using more of your own electricity at home and reducing the amount you need to buy from the grid. But SEG can still improve the overall return on your system by giving you a way to earn from surplus generation that would otherwise go unused. That is why it is worth joining if you are eligible: you may not make a fortune, but there is little reason to give away exported electricity for free.
The main caveat is that the scheme is less generous and less predictable than the old Feed-in Tariff. Unlike FIT, SEG does not offer a government-set fixed payment, and export payments depend on the tariff you choose and, in many cases, on having a smart meter or export meter capable of half-hourly readings. So the initiative is worth it, but only if you go in with realistic expectations: think of it as one part of the payback calculation, alongside installation costs, bill savings and how much solar power your household can use itself.
While SEG offers a simple route to earn money from exports, it’s only part of the broader economic picture. Most households save far more by using their solar energy directly. Combining solar with a battery, going for time‑of‑use tariffs, or shifting appliance use into daylight hours all help reduce reliance on grid electricity and can offer better returns than export payments alone.
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