Smart Export Guarantee for business

If your business generates its own electricity from solar panels, a wind turbine or another eligible source, the Smart Export Guarantee (SEG) is the route to being paid for whatever you export to the grid rather than use on site. This guide uses Ofgem’s own published data to explain what SEG covers, how tariffs are structured, and what current rates actually look like.

What is the Smart Export Guarantee?

The SEG is a government-backed scheme that requires certain electricity suppliers to pay eligible small-scale generators, including businesses, for the electricity they export to the grid. It came into force on 1 January 2020 under the Smart Export Guarantee Order 2019, replacing the old Feed-in Tariff for new installations. The Department for Energy Security and Net Zero (DESNZ) sets SEG policy, and Ofgem administers it: publishing guidance, maintaining the list of participating suppliers, and reporting annually on how the scheme is performing.

The scheme has grown quickly. Ofgem’s SEG Year 5 annual report, covering April 2024 to March 2025, recorded 270,395 installations registered to a SEG tariff at the end of the year, up 63% on the year before, with £56.97 million paid out for 443.1 GWh of exported electricity, an 86% increase on the previous year.

Is your business eligible for SEG?

Your business is eligible if it has an installation using an eligible technology, up to the capacity limit, connected in Great Britain. The eligible technologies are:

• Solar photovoltaic (PV)
• Onshore wind
• Hydro
• Anaerobic digestion (AD)
• Micro-combined heat and power (micro-CHP)

Installations can have a total installed capacity of up to 5 megawatts (MW), except micro-CHP, which is capped at 50kW. For solar PV, wind and micro-CHP installations up to 50kW, you need to show a Microgeneration Certification Scheme (MCS) certificate or equivalent. For larger or other installations, suppliers have discretion in how they check eligibility, and anaerobic digestion installations must submit a compliance declaration to Ofgem first.

In practice, almost any business solar installation will fall comfortably inside these limits. Ofgem’s data shows solar PV makes up 99.98% of all SEG installations, and 95.3% of solar PV registrations were 10kW or smaller, though business rooftop systems in the tens of kW are common and still well inside the cap. Our commercial solar panels guide covers what a system might cost and produce.

Larger commercial and industrial sites are not excluded either. Ofgem’s data shows a small number of much bigger installations on the scheme: 15 solar PV installations over 1MW were registered in SEG Year 5, along with the UK’s few eligible wind and anaerobic digestion plants, together making up a small share of registrations but a disproportionate share of total exported electricity, since bigger sites naturally export more.

Where SEG installations are, and what they earn

Ofgem’s Year 5 data also breaks registrations down by nation and technology. Of the 270,395 installations registered at the end of the year, 86.7% were in England, 7.7% in Scotland and 5.6% in Wales, roughly in line with population and rooftop solar deployment. Across all technologies, 95.45% of exported electricity came from solar PV, with hydro, wind, anaerobic digestion and micro-CHP making up the remaining 4.55% between them, mostly from a much smaller number of larger installations.

How much does SEG pay per kWh?

Rates vary a great deal between suppliers and tariff types, and change often, so check current rates directly rather than relying on a figure you’ve seen elsewhere. Ofgem’s SEG Year 5 report gives a clear picture of where rates stood in that period:

Measure	Untied tariffs	Tied tariffs
Average rate offered	4.47p/kWh	15.39p/kWh
Highest rate offered	12p/kWh (Scottish Power)	40p/kWh (E.ON, tied to solar and battery purchase)
Lowest rate offered	1p/kWh	5p/kWh
Average rate actually paid to generators	7.3p/kWh	15.4p/kWh

The number of tariffs on the market has grown steadily too: from 21 tariffs in the SEG’s first year to 50 tariffs from 11 licensees in Year 5. Every SEG tariff, tied or untied, must pay a rate greater than 0p/kWh at all times, but beyond that, suppliers are free to set their own rate, contract length and terms.

What is the difference between a tied and untied SEG tariff?

An untied tariff is open to any eligible generator, whichever supplier provides your electricity. A tied tariff pays more, on average, but comes with conditions. Every mandatory supplier must offer at least one untied tariff, but many also offer tied tariffs alongside it. Common conditions Ofgem found in Year 5 included:

• Buying your import electricity from the same supplier (the most common and least restrictive condition).
• Having bought solar panels, a battery, or both, from that supplier or an approved installer.
• Being on a specific linked import tariff, sometimes one that lets the supplier control your battery’s charging and export in return for a higher rate.
• For one business-focused Utility Warehouse tariff, purchasing energy plus two or more additional services.

Ofgem’s analysis found that where a supplier offered both, the tied rate was always higher than its own untied rate. But looking across the whole market, some suppliers’ highest tied rates were still lower than the best untied rates elsewhere, so a tied tariff doesn’t automatically mean the best deal. Several suppliers, including EDF, E.ON, Octopus and Utility Warehouse, publish tariffs specifically labelled for business customers, alongside their consumer tariffs.

Worked example comparing tied and untied rates

This uses Ofgem’s own average rates from SEG Year 5 as an illustration. Your own export volume and available rates will differ.

Input	Value
Assumed annual export	3,000 kWh
Average untied rate (SEG Year 5)	4.47p/kWh
Average tied rate (SEG Year 5)	15.39p/kWh

• On the average untied rate: 3,000 kWh x 4.47p = about £134 a year.
• On the average tied rate: 3,000 kWh x 15.39p = about £462 a year.

The gap looks large, but a tied tariff’s condition, such as needing to buy a battery from that supplier or move your whole electricity contract to them, has its own cost and trade-offs that this simple example ignores. Compare the whole package, not just the rate.

Which suppliers must offer SEG and how do you apply?

Electricity suppliers with at least 150,000 domestic customers are “mandatory” SEG licensees and must offer at least one qualifying tariff. Smaller suppliers can join voluntarily. In SEG Year 5, 11 suppliers offered SEG tariffs, and Octopus Energy accounted for 71% of all registered installations. Suppliers must:

• Offer at least one tariff open to any eligible generator, at a rate above 0p/kWh.
• Assess your installation’s eligibility.
• Base payments on export meter readings.
• Handle complaints from generators.
• Publish their SEG status and rates so they’re easy to find.
• Give you written confirmation of your tariff’s terms.
• Give at least 6 weeks’ notice before ceasing to offer SEG.

To apply, you’ll typically go through your installer or directly to a supplier once your system is commissioned and, where needed, MCS certified. Shop around: because SEG is a competitive market rather than a fixed government rate, the tariff you’re automatically offered by your current electricity supplier is often not the best one available.

Ofgem also monitors how well suppliers meet these obligations. Its Year 5 compliance review found some suppliers had gaps in their procedure documentation, incomplete written confirmations, or long wait times for customers whose applications were pending approval. All the issues identified were subsequently resolved with the suppliers concerned, but it’s a reminder to check your written tariff confirmation carefully and chase up an application that’s taking a long time to process.

What metering do you need?

SEG payments are based on export meter readings, so your installation needs a meter capable of recording the electricity you send back to the grid. For most business solar or wind installations, this is fitted alongside the generation equipment and is often a smart meter capable of both import and export readings. Your installer should confirm what meter your system needs and whether it meets your chosen supplier’s requirements before you sign up to a tariff.

You’ll also need to notify your local distribution network operator (DNO) about the installation, and larger systems need approval before connecting. Our commercial solar panels guide explains the G98 and G99 connection process in more detail.

How does SEG compare with other ways to sell electricity?

For most businesses with a single site and a modest system, SEG is the simplest route to being paid for exported electricity. Larger sites, or those with more predictable, high-volume export, sometimes look at other routes instead or as well:

• A power purchase agreement (PPA), typically used for larger generation assets or long-term contracts with a specific buyer, rather than small-scale rooftop systems.
• A private wire arrangement, where you supply another nearby site directly rather than exporting to the public grid.
• Battery storage, which doesn’t change your SEG rate but can reduce how much you need to export at all, by shifting your own generation to when you need it. See our battery storage guide.

Our power purchase agreements guide explains where PPAs fit and why they’re harder for smaller buyers to access than SEG.

How do you choose a SEG tariff for your business?

1. Confirm your eligibility and get MCS certification (for solar, wind or micro-CHP up to 50kW) as part of your installation.
2. Check whether your installer’s default supplier tariff is actually the best one available, rather than accepting it automatically.
3. Compare untied tariffs across suppliers first, since they don’t tie you into anything else.
4. Read tied tariff conditions carefully. A higher headline rate that requires switching your whole electricity contract, or buying a battery you weren’t planning on, may not be worth it once you account for the rest of the deal.
5. Check the contract length and whether the rate is fixed or variable, and how it might change over the term.
6. Confirm your metering meets the supplier’s requirements before you commit.
7. Revisit your tariff periodically. Ofgem’s data shows the number and range of tariffs has grown every year, so a better deal may now be available even if you compared thoroughly when you first installed your system.

Once you’re generating and exporting, the electricity you still buy is a separate decision. Compare business energy quotes to make sure your import contract is competitively priced alongside whatever you earn from exporting your surplus.

Frequently asked questions