The Smart Export Guarantee for Business

The Smart Export Guarantee (SEG) pays your business for the solar electricity it generates but does not use on site — the surplus that flows back to the grid. It is worth understanding properly, because owners and operators routinely overestimate how much it contributes. Export earns roughly 12–16p per unit on the best fixed tariffs; the electricity you consume yourself avoids a grid price closer to 24–28p. The SEG is real money and worth claiming, but it is a top-up on the return, not the engine of it. Get the order of operations right and you size the system to your own demand first, then treat export as the bonus on the units you cannot absorb.

What the Smart Export Guarantee actually is

The SEG is a UK Government scheme (England, Scotland and Wales) that obliges larger licensed electricity suppliers to offer a payment for renewable electricity exported to the grid. It launched on 1 January 2020 to replace the export element of the old Feed-in Tariff. The obligation applies to suppliers with 150,000 or more domestic customers; smaller suppliers can offer a tariff voluntarily but are not compelled to.

To claim, you need an export meter that can measure half-hourly what you send to the grid — in practice a smart meter (SMETS2 or a compatible MID-certified export meter) plus a metered, settled export reading. Your installation also needs to meet the eligibility conditions, which for most commercial rooftop systems means MCS certification (or the equivalent under the larger-installation route). The export capacity cap under the SEG is 5MW, so the scheme comfortably covers the overwhelming majority of commercial rooftop and car-park projects.

Critically, the SEG payment is a separate commercial arrangement from your import supply. You are paid for what you export; you still pay your supplier for what you import. Many businesses take import and export from the same supplier for administrative simplicity, but you are not obliged to — and the best export rate and the best import rate rarely sit with the same company.

Supplier-set, not a government rate — and not the Feed-in Tariff

This is the single most important thing to understand, and the point most often confused. The Government mandates that obligated suppliers must offer an SEG tariff, but it does not set the rate. Each supplier sets its own price, terms and tariff type. That means rates vary widely between suppliers and change over time, and it is on you (or your broker) to shop the market.

The SEG is not the Feed-in Tariff. The FiT closed to new applicants on 31 March 2019. The FiT paid two things: a generation tariff on every unit you produced (whether you used it or exported it) plus an export tariff, both index-linked and guaranteed for 20–25 years. The SEG pays only for export, at a supplier-set rate, with no generation payment and no government-guaranteed long-term floor. If you bought a system on the expectation of FiT-style economics, recalibrate — the returns now come from avoided consumption, not from a generous subsidy on generation.

SEG tariffs broadly split into two types:

• Fixed export tariffs pay a flat rate per exported unit for the contract term. The best fixed rates currently sit around 12–16p/kWh. These give you predictable, bankable income — useful for modelling a payback and for any capital allowances and funding case you put to owners or lenders.
• Variable or agile export tariffs track wholesale prices half-hour by half-hour. They can pay more than a fixed rate when demand is high (summer evenings, cold snaps), and far less — sometimes near zero — when the grid is awash with solar at midday. For a business exporting mostly daytime solar, a variable tariff can underperform a good fixed one, because your export peaks exactly when wholesale prices are lowest.

For most commercial property owners, a strong fixed tariff is the sensible default: it is simple, predictable and easy to underwrite. Variable tariffs reward sites with battery storage that can shift export into higher-priced windows.

Why self-consumption beats export — and how to size for it

Run the numbers and the conclusion is unambiguous. Every unit of solar you consume on site displaces a unit you would otherwise buy at roughly 24–28p (commercial day rate, ex-VAT, varies by site and contract). Every unit you export earns roughly 12–16p. Self-consumed electricity is worth close to twice as much as exported electricity. The return on a commercial solar system is therefore driven first and foremost by how much of your own generation you use, not by how much you sell back.

That has a direct design consequence: size the array to your on-site demand profile, not just to the available roof. A system that overshoots your daytime load dumps the surplus to the grid at the low export rate, dragging down the blended value of every kilowatt-hour produced. A system matched to demand keeps the bulk of generation working at the 24–28p displacement value.

Typical self-consumption outcomes:

• Solar only: ~30–50% of generation used on site, the rest exported. Good for sites with steady daytime load (manufacturing, warehousing with daytime picking, offices on weekdays).
• Solar plus battery: ~60–80%, by storing midday surplus for use later in the day. The battery converts units that would have exported at ~12–16p into units displacing ~24–28p — that arbitrage, not grid-services income, is usually the main case for commercial battery storage.
• 24/7 operations: ~90–95%, where a site runs around the clock and absorbs nearly everything it makes.

If your weekend or holiday load drops to near zero while the sun still shines, that surplus has nowhere to go but export — another reason to model the SEG honestly into the case and another argument for storage. Our cost page sets out the capital figures by system size, and the grants and funding overview covers how the SEG sits alongside capital allowances and other support.

REGOs: a separate income stream worth knowing about

Exported renewable electricity also creates Renewable Energy Guarantees of Origin (REGOs) — certificates, one per MWh generated, that prove the electricity came from a renewable source. Businesses and suppliers buy REGOs to back green-tariff and ESG claims, so they have a market value.

REGOs are modest — in the order of £15/MWh, or about 1.5p per unit — and the value fluctuates with demand for green certification. Some SEG tariffs implicitly capture REGO value within the headline rate; others let you retain and sell the REGOs separately, or keep them to support your own net-zero and sustainability reporting. For most single-site commercial systems the sums are small, but at portfolio scale they add up and are worth raising with your supplier when you negotiate the export contract. They are a separate stream from the SEG payment itself, not a substitute for it.

Putting it together

Treat the SEG as the last lever, not the first. The hierarchy of value on a commercial solar system runs: (1) maximise self-consumption at 24–28p, (2) store surplus to lift self-consumption further where the battery economics work, (3) export the remainder under the best fixed SEG tariff you can secure at ~12–16p, and (4) capture REGO value on top where the contract allows. Build the business case in that order and you will neither overstate the export income nor leave money on the table.

When you procure, shop the SEG market the same way you shop your import supply — the obligated suppliers each price differently, and the gap between a poor tariff and a good one is several pence per unit across the life of the system. For sites pairing solar with a power purchase agreement or financing the asset rather than buying outright, factor the export arrangement into the structure from the start rather than bolting it on afterwards.

Frequently asked questions

Is the Smart Export Guarantee a fixed government rate?

No. The Government obliges larger licensed suppliers to offer an SEG export tariff, but each supplier sets its own rate and terms. Rates vary between suppliers and change over time, so it pays to compare the market rather than default to your import supplier. The best fixed rates are currently around 12–16p/kWh.

How is the SEG different from the old Feed-in Tariff?

The Feed-in Tariff closed to new applicants on 31 March 2019. It paid a generation tariff on every unit produced plus an export tariff, both index-linked and guaranteed for 20–25 years. The SEG pays only for exported units, at a supplier-set rate, with no generation payment and no long-term government-guaranteed floor. The economics of new commercial solar now come from avoided consumption, not from subsidy.

Should I size my system to maximise export income?

No. Self-consumed electricity displaces grid power at roughly 24–28p per unit, while export earns only about 12–16p — so a self-consumed unit is worth close to twice an exported one. Size the array to your on-site demand profile, use a battery to lift self-consumption where the numbers work, and treat the SEG as a top-up on the surplus you genuinely cannot use.