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Smart Export Guarantee: The Basics of The SEG

Last edited: 18/02/21

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Smart Export Guarantee: The Basics of The SEG

Last edited: 18/02/21

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The SEG (or the Smart Export Guarantee) pays customers for the renewable electricity they have generated and given to the grid. Since the start of 2020, big companies had to participate. It replaces the FIT (or Feed-in Tariff) scheme, which pays a lot of solar panel owners for the electricity they generate at home.

What’s the Smart Export Guarantee?

The SEG compensates households for the excess renewable electricity they generate but don’t use themselves. The electricity may be generated by the renewable technologies listed below:

  1. Anaerobic digestion
  2. Micro combined heat and power
  3. Hydro
  4. Wind
  5. Solar panels

Under the new scheme, the government claimed that homes producing excess renewable electricity for the grid would receive a guaranteed payment. However, it requires you to sign up for an SEG tariff with a firm; otherwise, you won’t receive any payments for your electricity. This means you’ll be giving your electricity to the National Grid for free.

Types of Smart Export Guarantee tariff

There are two types of Smart Export Guarantee tariffs:

  1. Fixed-rate: The fixed-rate SEGs have a set amount. They pay per kilowatt-hour of electricity you offer to the grid, irrespective of the time you export it. Currently, the majority of the SEG tariffs on offer follow this method.
  2. Flexible rate: The flexible rate SEGs pay differing amounts based on how valuable electricity is to the system at various times. For instance, the rates may be associated with day-ahead wholesale prices. So you have a chance of being compensated more if you give electricity at a time when the demand is high: in the evening, for example.
  3. Multi-rate: There are certain companies that may also offer multi-rate SEGs where the set rates for electricity are different for electricity exported at different times, such as weekend, weekday, or day and night rates.

To complicate things a bit more, certain firms offer tariffs where the price is fixed for the contract duration, while others are providing variable rates. This variable rate means that they can change the price of the tariff based on whether they want to pay less or more for your electricity. However, you should be given 30 days’ notice.

Types of Smart Export Guarantee tariff

There are two types of Smart Export Guarantee tariffs:

  1. Fixed-rate: The fixed-rate SEGs have a set amount. They pay per kilowatt-hour of electricity you offer to the grid, irrespective of the time you export it. Currently, the majority of the SEG tariffs on offer follow this method.
  2. Flexible rate: The flexible rate SEGs pay differing amounts based on how valuable electricity is to the system at various times. For instance, the rates may be associated with day-ahead wholesale prices. So you have a chance of being compensated more if you give electricity at a time when the demand is high: in the evening, for example.
  3. Multi-rate: There are certain companies that may also offer multi-rate SEGs where the set rates for electricity are different for electricity exported at different times, such as weekend, weekday, or day and night rates.

To complicate things a bit more, certain firms offer tariffs where the price is fixed for the contract duration, while others are providing variable rates. This variable rate means that they can change the price of the tariff based on whether they want to pay less or more for your electricity. However, you should be given 30 days’ notice.

Is it possible for me to get a Smart Export Guarantee tariff?

If you install a wind turbine, solar panels, or other renewable generation at home, you should be fine with signing up for an SEG tariff. However, you’ll need to meet certain criteria:

  1. Your installation must be MCS-certified
  2. You’ll need a meter that can offer half-hourly readings for electricity export
  3. Your installation must be 5MW capacity or less; 50kW for micro-CHP

To offer half-hourly meter readings, it’s likely that you’ll need a smart meter. Although the government claims that the benefits of SEG can still be leveraged without a smart meter, you’ll need something better than a conventional meter because taking half-hourly readings is beyond their functionality. According to the government, certain advanced meters can do this – but you’ll need to get one of these installed.

If you want to know more about social energy, call REST now, and one of our friendly customer support representatives will be happy to assist you!

Russell White

About Russell White

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