Page type: primary-anchored (mirrors Smart Export Guarantee scheme rules)

Smart Export Guarantee (SEG)

The Smart Export Guarantee is a scheme requiring licensed electricity suppliers in Great Britain to pay small-scale low-carbon generators for electricity they export to the grid. It launched on 1 January 2020, replacing the Feed-in Tariff export payment for new applicants.

Primary source: ~/knowledge/sources/ofgem/schemes/seg.md

Legal architecture

The SEG sits across three legal layers, which is unusual for a GB energy scheme:

1. The Smart Export Guarantee Order 2019 (SI 2019/1005), made under Energy Act 2008 sections 41-43. Sets the maximum capacity threshold (5 MW) and gives Ofgem functions for AD sustainability verification, publishing guidance, maintaining the licensee list, and annual reporting (Arts. 3-8).

2. Electricity Supply Licence, SLC 57 and SLC 58, with Schedule A to SLC 57. These impose the core obligations on supply licensees: offer at least one export tariff, ensure the rate is above zero, publish tariff details, report to Ofgem. Schedule A defines the key terms (eligible installation, SEG generator, SEG licensee, SEG year, etc.).

3. Ofgem guidance documents (December 2019). Interpret the licence obligations for licensees and generators. Not legally binding in themselves, but Ofgem treats them as the expected standard of compliance.

The Order delegates most definitions to Schedule A to SLC 57 rather than defining them in the Order itself (Art. 2(2)). This means the licence conditions are the primary repository of SEG rules, with the Order handling only the capacity threshold and Ofgem's supervisory functions.

See also: Electricity Supply Licence for the broader licence framework.

Who participates

Mandatory SEG licensees

Any electricity supply licensee with at least 150,000 domestic electricity customers as at 31 December of the preceding year must participate for the entire following SEG year (Schedule A to SLC 57). They cannot opt out. If they lose the threshold mid-year, they remain mandatory until 31 March (Generators Guidance, para. 2.7).

As of Year 7 (April 2026 - March 2027), 12 suppliers are mandatory: British Gas, E (Gas and Electricity), E.ON Next, EDF Energy Customers, Electricity Plus Supply (Utility Warehouse), Foxglove Energy, Fuse Energy, Octopus Energy, OVO Electricity, ScottishPower Energy Retail, So Energy, and Utilita Energy.

Voluntary SEG licensees

Suppliers below 150,000 domestic customers may opt in for the full SEG year (Schedule A). Four are currently voluntary: Pozitive Energy, Ruby Electricity, Smart Pay Energy, Voltx Power.

Annual declaration

All supply licensees must declare their SEG status by 14 February each year for the following SEG year (1 April - 31 March). The first SEG year was extended: 1 January 2020 to 31 March 2021 (Schedule A).

Eligible installations

An installation qualifies if it meets all of:

Certification requirements vary by technology and capacity:

Without certification, a SEG licensee has no obligation to pay -- but may choose to (Generators Guidance 1.14).

Export tariff obligations

SEG licensees must offer at least one export tariff to any eligible generator (Schedule A). The key constraints:

• Above-zero floor: Tariff rate must be greater than zero pence per kWh at all times (Generators Guidance 1.3). There is no minimum price beyond this, no wholesale price link, and no cost-reflectiveness requirement.
• Licensee sets terms: Rate, type, contract length, and other terms are at the licensee's discretion (Schedule A).
• Publication: Licensees must publish their SEG status and tariff deals in an easily accessible location (Schedule A).
• One tariff at a time: A generator can only hold one SEG export tariff at a time, but the SEG licensee need not be their import supplier (Generators Guidance 1.24).

There is no levelisation fund or cross-subsidy mechanism. SEG licensees bear the full cost from their own revenues. This is a fundamental structural difference from the FIT.

Metering and payment

• Export must be measured by a meter capable of half-hourly readings, located at the grid connection point, with an export MPAN (Generators Guidance 1.17-1.22).
• No deemed export. Unlike the FIT (which allowed 50% deemed export), the SEG requires actual metered export. No meter readings = no payment obligation (Generators Guidance 2.4).
• Payment frequency is at the licensee's discretion; there is no legislative requirement on timing (Generators Guidance 2.3).

The SEG contract

Written confirmation from the SEG licensee forms the contract (Generators Guidance 2.1). Minimum terms must include (per SLCs Section B, 5.2):

1. Complaints procedure
2. Switching process
3. Termination rights
4. Risks of non-compliance
5. Information/declaration obligations
6. Ownership change notification
7. Extension notification
8. Duty to fulfil obligations efficiently

Interaction with other schemes

Anaerobic digestion sustainability regime

AD installations face additional requirements under the Schedule to the SEG Order 2019:

• Sustainable biogas obligation: SEG payments only for electricity from sustainable biogas (Sch. para. 2).
• Quarterly declarations: Biogas from waste, meets GHG criteria, or from solid biomass meeting land criteria; due within 28 days of quarter end (Sch. para. 3).
• Annual feedstock declarations: Total electricity, feedstock details, proportion not from waste/residue (4 decimal places); due within 3 months of period end (Sch. para. 4).
• Independent audit (>=1 MW): Under ISAE 3000 (Revised), by an auditor independent under Corporation Tax Act 2010 (Sch. para. 5).
• GHG thresholds: Tightening over time -- currently 50 g/MJ from 1 April 2025 (Sch. para. 7).

The AD sustainability framework mirrors the Renewables Obligation sustainability regime, using the same GHG calculation methods (actual value and default value per RO Order Schedule 2).

Ofgem's supervisory role

Ofgem's functions under the SEG Order (Arts. 4-8):

• Verify AD sustainability compliance (Art. 4)
• Publish and maintain SEG guidance (Art. 5)
• Publish annual list of SEG licensees, distinguishing mandatory from voluntary (Art. 6)
• Publish annual reports covering tariffs, installations, generation, payments, and breakdowns by capacity and energy source (Art. 7)
• Require information from SEG licensees (Art. 8)

Ofgem does not accredit or register SEG generators. Applications go directly to the SEG licensee. This is a key difference from the FIT and REGO schemes, where Ofgem handles accreditation.

Complaints and disputes

1. Generator raises complaint with SEG licensee (Generators Guidance 3.1)
2. If unresolved after 8 weeks, escalate to the Energy Ombudsman (3.2)
3. SEG licensee has 28 days to act on Ombudsman recommendations (3.3)

Licensee status changes and insolvency

• A mandatory SEG licensee cannot choose to stop offering a tariff mid-year (Generators Guidance 2.6).
• If a licensee ceases SEG status, it must notify generators within 6 weeks (2.9).
• In insolvency, Ofgem cannot order a new licensee to pay the old licensee's debts. Generators must find a new SEG licensee (2.10).

Scheme performance

As of Year 5 (April 2024 - March 2025, from the SEG Annual Report):

• 270,395 registered installations (up from 166,022 in Year 4)
• 1,585 MW total installed capacity
• 443.1 GWh exported (nearly doubled from 283.1 GWh)
• £56.97 million in payments (up from £30.75 million)
• 50 tariffs from 11 licensees
• 99.98% solar PV

The scheme is growing rapidly, driven by residential solar PV installations.

Structural comparison with FIT

Defined terms

See the canonical source file at ~/knowledge/sources/ofgem/schemes/seg.md for the full register of 22 defined terms.

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Last updated: 2026-04-05