What is the Smart Export Guarantee (SEG) and How Does It Affect Solar Installers?
The Smart Export Guarantee (SEG) is one of the most important commercial drivers for residential solar in the UK – and as a solar installer, understanding it is essential both for advising customers and for positioning your business competitively.
This guide explains what the SEG is, how it works, what it means for your customers, and what solar installers need to know.
What is the Smart Export Guarantee?
The Smart Export Guarantee (SEG) is a government-mandated scheme that requires licensed electricity suppliers with 150,000 or more customers to offer tariffs for small-scale, low-carbon generation exported to the grid.
In plain English: homeowners with solar panels can get paid for electricity they generate but don’t use, by selling it back to their energy supplier.
The SEG replaced the Feed-in Tariff (FiT) which closed to new applications in 2019. Unlike FiT, the SEG rate is not fixed by government – each supplier sets their own rate, which must be greater than zero.
The scheme is administered by Ofgem.
How SEG Works for Homeowners
- Solar panels generate electricity – the home uses what it needs first
- Excess electricity flows to the grid – via the export meter
- The energy supplier measures the export – requires a smart meter capable of half-hourly export readings
- The homeowner gets paid – at the agreed SEG rate per kWh exported
Current SEG rates (2026): SEG rates vary by supplier and tariff. As of 2026, rates typically range from 3p to 15p per kWh exported, with some providers offering higher rates for certain time periods. Customers should compare available tariffs at ofgem.gov.uk.
SEG Eligibility Requirements
For a customer to access the SEG, their installation must meet these criteria:
| Requirement | Detail |
|---|---|
| System size | Maximum 5MW (domestic installs are well within this) |
| MCS certified installation | Must be installed by an MCS-certified installer |
| Smart meter | Export smart meter capable of half-hourly metering required |
| Registration | Installer registers the installation on the MCS database |
The MCS requirement is the key commercial implication for installers. Customers without an MCS-certified installation cannot access the SEG. This is why MCS certification is effectively mandatory for residential solar installers.
How to Use SEG in Your Sales Process
The SEG is a powerful sales tool. When quoting solar, include a projected SEG earnings estimate:
Example for a typical 4kWp system: – Annual generation: ~3,400 kWh (UK average) – Self-consumption: ~50% = 1,700 kWh used, 1,700 kWh exported – At 6p/kWh SEG rate: £102/year in export earnings – Combined with ~£600/year in reduced energy bills – Total annual benefit: ~£700+
This makes payback periods tangible and realistic. A professional quote that includes a projected savings and earnings breakdown wins more conversions than one that just shows a system price.
Smart Meters and SEG
A key practical point for installers: the customer needs a second-generation smart meter (SMETS2) to access export payments. A standard electricity meter won’t measure export accurately.
Most UK homes already have or are eligible for a free smart meter from their supplier. If a prospective solar customer doesn’t have one, advise them to request one from their supplier before installation – it’s free and takes 1-2 months to arrange.
SEG for Battery Storage
Battery storage complicates the SEG slightly. When a battery system is installed alongside solar:
- The battery stores excess solar generation instead of exporting it
- Less electricity is exported to the grid
- SEG earnings are therefore lower when battery is included
- But the self-consumption benefit is higher (more free electricity used)
The net effect is usually positive for the customer. A battery typically increases the financial benefit of solar even at the expense of some SEG income. Your quote should model both scenarios – solar only and solar + battery – to help customers make an informed decision.
Conclusion
The trades industry rewards those who combine excellent work with professional business practices. The guidance above covers the practical fundamentals – applying it consistently is what separates the tradespeople who stay busy and profitable from those who struggle with feast-and-famine cycles. For further guidance, visit Smart Export Guarantee: Ofgem.
Frequently Asked Questions
What replaced the Feed-in Tariff?
The Smart Export Guarantee replaced the Feed-in Tariff for new applicants from 2020. Existing FiT recipients continue to receive their original payments until their tariff period ends (typically 20 years from installation). The SEG offers lower export rates than the original FiT but is still a meaningful financial benefit.Which energy suppliers offer the best SEG rates?
SEG rates change frequently. Ofgem maintains a list of SEG licensees and customers should check current rates directly with suppliers. As of early 2026, Octopus Energy and OVO Energy are among the more competitive SEG providers.Does the SEG affect my VAT as a solar installer?
No – the SEG is a payment from the energy supplier to the homeowner. It doesn’t affect your VAT position as the installer. Solar installation VAT is a separate issue – see HMRC’s guidance on VAT on energy-saving materials for installer obligations.What happens if a customer moves house?
The SEG is linked to the installation, not the person. The new occupant can apply for a SEG tariff for the installed system – they don’t need to reapply from scratch, but they do need to set up their own SEG agreement with their energy supplier.Related reading:
