What is the Smart Export Guarantee?
Following the discontinuation of the Feed-in Tariff the Smart Export Guarantee was created in January 2020 to fill the hole the tariff left behind, to ensure ‘small-scale generators’ (domestic homes with solar panels) are paid for the renewable electricity they export to the grid.
However, instead of being based on payments from the government like the Feed-in tariff, the Smart Export Guarantee ensures that energy suppliers pay homeowners for ANY UNUSED solar-generated electricity. This electricity gets exported back to the national grid for use in other homes and businesses. The Feed-in tariff meant the government used to pay homeowners for just 50% of their unused solar-generated electricity, even if households were exporting as much as 80% of their electricity back to the grid. With the Smart Export Guarantee in place, homeowners are now benefitting from 100% of their solar panels’ hard work.
What is the difference in rates?
While Ofgem set the rates for the Feed-in Tariff, the Smart Export Guarantee meant all licenced energy companies with 150,000 or more customers must provide at least one SEG tariff where they could determine their own prices. In a competitive energy market, this has led to companies outbidding each other with higher repayment rates, creating better offers for homeowners.
Have a smart meter? Things are even easier! Smart Export Guarantee tariffs can be fixed or variable, but with a smart meter constantly updating and feeding back to your electricity provider on your usage means they can keep on top of what is owed in real time.
Smart Export Guarantee and Battery Storage
If you’ve opted for an energy storage system alongside your solar panel installation, you can still apply for the Smart Export Guarantee but your supplier may have a few rules depending on your tariff contract. Your battery could store electricity from the grid (known as brown electricity) before exporting it later on. In short, some energy suppliers many only pay the SEG for green electricity (eg. the electricity your low-carbon system generates itself) and do not have to pay you for brown electricity exported to the grid but they may choose to do so. In this case your energy supplier may ask you to show how you separate out the green electricity, if this is the case though you can ask your installer to show you how to do this.
Will you still make savings?
In contrast to the Feed-in tariff where it was expected that homeowners would recover costs in a relatively short period , the Smart Export Guarantee is probably more beneficial for households thinking of staying in their home for the long term as the return on investment will be much slower. If you’re thinking of getting solar panels and are wanting to re-coup costs fairly quickly than the SEG is probably not the reason why you want to opt for solar power in your home.
Griff Services Ltd provide the latest in renewable energy technology for domestic and commercial use, allowing you to save both money and the planet. Get in touch today to arrange your free survey for a solar and battery storage solution for your home.