Homeowner Blog

Smart Export Guarantee Tariffs: Which is the Best Rate?

George Riley 08 Jan 2020

The new year kicked off with the introduction of the Smart Export Guarantee (SEG), which came into law on January 1st. It’s the long awaited return of a scheme to ensure solar PV owners are paid for the power they send to the grid, ending the policy void that’s existed since the Feed-in Tariff closed to new applicants last March.

According to the SEG, energy suppliers with over 150,000 customers must offer an export tariff with a rate greater than zero. The SEG is available for customers with an MCS-certified renewable energy system under 5MW and a smart meter.

With zero as the minimum, at the very least you can’t be charged for being relieved of excess solar power. However, suppliers don’t have to give you very much for it. So how much are they offering in practice?

SEG tariffs on offer

 

Supplier

Tariff

Rate paid per kWh

Social Energy

SEG Tariff

5.6p

Octopus

Outgoing Fixed

5.5p

Outgoing Agile

Variable tracking day-ahead wholesale price

E.ON

Fix & Export Exclusive

5.5p

Fix & Export

3p

Bulb

Export Payments

5.38p

OVO

OVO SEG Tariff

4p

ScottishPower

Smart Export Variable Tariff

4p

SSE

Smart Export Tariff

3.5p

EDF

Export+Earn

3.5p

Shell Energy

SEG Tariff

3.5p

British Gas

Export & Earn Flex

1.5p

Green Network Energy

SEG Tariff

1p

Utility Warehouse

UW Smart Export Guarantee

0.5p

Rates correct as of the date of publication. Please see Solar Trade Association’s league table for more details.

There are encouraging rates available - some even higher than the 5.24p/kWh export component of the FiT before its closure to new applicants last March. While most are fixed rates, we can expect more dynamic pricing in future with the rise of smart metering. E.ON is offering a higher ‘exclusive’ rate to customers who have installed E.ON solar.

The low offerings from companies like British Gas clearly just exist to comply with the law, while deterring microgenerators to avoid the hassle of managing their supply. It’s a shame these suppliers are missing the chance to engage with small scale renewables, but it does leave the door open for the more innovative disruptors.

How your choice of tariff affects payback

A 4kWp system is expected to produce 3,350kWh per year. Working on the basis that 50% of this is exported to the grid, export payments would be:

Export tariff price per kWh

Annual export payments

Average payback time

5.6p

£94

11 years

5.5p

£92

11 years

4p

£67

11 years

3p

£50

12 years

1.5p

£25

13 years

0.5p

£8

14 years

Payback time is calculated assuming electricity prices and export tariffs inflate year-on-year.

While the much lower tariffs provide minimal annual returns, they only add a few years to the payback time, and there is little difference between 4p or 5.5p. This is because most of the savings come from using your solar power on site, where it displaces grid electricity at 16p per kWh.

Which tariff should you choose?

The natural instinct is to go for the highest export tariff, but you should also note the details of the offer:

  • how often you get paid;
  • minimum payment thresholds;
  • how you get paid (bank transfer/cheque etc);
  • whether export payments cover power from battery storage;
  • length of the term you’re locked into the tariff;
  • whether the rate may change during your contract.

According to Ofgem, you can choose different companies for your export payments and your electricity supply. But some suppliers such as SSE and Octopus insist you must be a customer to be eligible for their SEG tariff.

Calculate your savings

To see the effect of SEG rates on the payback and returns of your PV system, try out our solar calculator:

Go to solar calculator

Or if you’d like to find out more, give us a call on 0118 951 4490.

Topics: Tariffs, Solar PV

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