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Going green isn’t just the right decision for the environment. If your business, or even your household, generates its own low-carbon electricity, you might be able to sell any surplus energy back to the National Grid through the Smart Export Guarantee (SEG) scheme.
Below, we get into everything you need to know about the Smart Export Guarantee, including the eligibility requirements, the different types of rates available and how to apply.
What is the Smart Export Guarantee (SEG)?
Launched on 1 January 2020, the Smart Export Guarantee, in essence, replaced the Feed-in-Tariff (FiT) scheme, which was closed to new applicants on 31 March 2019.
The SEG is a UK government-backed initiative designed to encourage a shift towards greener energy, and can be used by domestic households and small businesses alike.
Electricity suppliers that offer Smart Export Guarantee tariffs are called SEG Licensees, while those producing their own energy are labelled SEG Generators.
Any electricity supplier with more than 150,000 domestic electricity customers is required to offer SEG tariffs. If the supplier has fewer than 150,000 domestic customers, they can opt-in to the scheme, but are not obligated to do so.
» MORE: UK energy crisis: what does it mean for your business?
Am I eligible for a Smart Export Guarantee tariff?
First, the Smart Export Guarantee is only available for people based in England, Scotland and Wales – unfortunately, the scheme does not apply to Northern Ireland.
And if you are already benefiting from the Feed-in-Tariff (FiT) scheme, you will be unable to secure a SEG tariff unless you opt out of your FiT payments.
Regardless of whether you use domestic or business energy, to be eligible for a Smart Export Guarantee you will need to have one of the following energy technology types installed at your property:
- solar photovoltaic (solar PV), e.g. solar panels
- onshore wind power, e.g. turbines
- micro combined heat and power (micro-CHP), e.g. a micro-CHP boiler
- hydro power, e.g. a hydro system
- anaerobic digestion (AD), e.g. an AD facility on a farm
For solar, wind, hydro and anaerobic digestion, the maximum total installed capacity (TIC) can be no more than 5 megawatts (MW). For micro combined heat and power, the limit is 50 kilowatts (kW).
You will need to demonstrate that the installation and the installer are suitably certified. This will typically be through the Microgeneration Certification Scheme (MCS), though other schemes may also be recognised. If you cannot demonstrate such certification, your SEG Licensee may still offer you a tariff, but this is not guaranteed.
Anaerobic digestion will require further sustainability and reporting requirements in order to be eligible for the SEG.
You will also need an export meter capable of half-hourly readings installed at your property or business premises, as well as a specific export MPAN, which can be provided by your SEG Licensee. All smart meters can act as export meters.
» MORE: Smart meters for businesses explained
Smart Export Guarantee commission – how much can my business make?
Just as different suppliers offer different energy tariffs for importing energy to your home or business, the same is true for the Smart Export Guarantee.
SEG Licensees decide their own export rates and contract lengths. However, your SEG tariff must always be above zero. In other words, a SEG Licensee cannot pay you nothing for the energy you produce.
Tariffs can range anywhere from around 1p to 7.5p per kilowatt, depending on the company. That is why it pays to shop around and carefully compare tariffs, as you would when switching traditional energy suppliers.
Many SEG tariffs will be fixed rate, meaning. you agree to a fixed export price at the start of your contract, though variable rates with fluctuating prices are available.
There are also specific tariffs for if you have certain types of storage batteries installed at your property.
Once you have secured your SEG tariff, your payments will be calculated using readings taken from your export meter.
How to become an SEG Generator
If you are interested in becoming an SEG Generator and meet the requirements, then you will need to apply to a SEG Licensee. You aren’t limited to the provider you already get your domestic or business energy from – the SEG Licensee can be a different supplier. The list of current SEG Licensees can be found here.
First, you should thoroughly compare tariffs and make sure that you are applying to the Licensee that is the best fit for your situation.
Then you will need to go through the specific application process of your chosen SEG Licensee. Although this will differ from provider to provider, you will likely be asked to supply a combination of the following:
- proof of ownership/entitlement to the SEG Payment
- meter reading from your export meter or smart meter
- export MPAN
- evidence of Microgeneration Certificate Scheme (MCS) or equivalent
- proof of sustainability and reporting requirements for anaerobic digestion technology
- confirmation letter or email from your Distribution Network Operator, stating that it has been notified of the installation of energy generating technology
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