Smart Export Guarantee

In detail

The Smart Export Guarantee replaced the Feed-in Tariff in 2020 and is now the standard mechanism by which UK businesses earn revenue from surplus solar generation. The scheme is structurally simple — large suppliers must offer at least one tariff for export — but tariff levels vary by an order of magnitude between best and worst suppliers. As of 2026, the best SEG rates sit around 12p–15p per kWh, with Octopus Energy's Outgoing Agile tariff (variable, tracking the half-hourly wholesale market) often the highest annualised return for systems with daytime-skewed generation. The worst SEG rates sit at the regulatory minimum, around 3p–5p, offered by suppliers who comply with the obligation but don't compete for export business. For commercial systems sized appropriately to demand (i.e. 70%–90% self-consumption), SEG income is a useful but secondary economic line — typically 5%–10% of total system value over 25 years. For oversized systems generating significant surplus, the calculation shifts: at high export volumes, a Power Purchase Agreement with a corporate offtaker often pays materially more than SEG, sometimes 50%–100% better. We model both for any system where export is expected to exceed 30% of generation.

Worked example

Tax treatment / process

1. Install MCS-certified system (or equivalent for >50kW) with half-hourly export meter
2. Apply to chosen SEG supplier with MCS certificate, MPAN, and export meter details
3. Sign export agreement specifying tariff and review terms
4. Receive payments quarterly or monthly based on metered export volumes

Pitfalls to watch

• SEG rates from your import supplier are usually NOT the best rates — switching the export contract separately is often worth it
• Some suppliers tie SEG to import tariff — restricts your ability to switch import supplier
• Half-hourly export metering required — adds a one-off cost
• Tariff often resets after 12–24 months — long-term certainty is limited
• PPAs can pay materially more than SEG for larger systems — worth comparing for >100kW systems

Best paired with these finance structures

Smart Export Guarantee: maximising export income for commercial solar

The Smart Export Guarantee (SEG) is the UK government scheme that requires licensed electricity suppliers (with 150,000+ customers) to offer export tariffs to eligible generators, including commercial solar installations. Unlike its predecessor Feed-in Tariff (FiT), SEG rates are market-set rather than government-fixed — which means shopping around matters.

For commercial solar owners, SEG income is a bonus revenue stream on top of the primary benefit of electricity bill reduction. For a 200kWp commercial installation exporting 30–50% of generation, SEG income might add £3,000–6,000/year. Not transformative, but worth optimising.

SEG eligibility for commercial solar

SEG rates comparison 2025

For commercial installations, Octopus Agile export typically delivers the best returns for installations with afternoon export peaks (schools, offices, warehouses) when wholesale prices are highest. For installations with consistent daytime exports (manufacturing sites running overnight), a fixed rate may be more predictable.

Maximising SEG income for commercial installations

SEG application process

SEG and PPA arrangements

A critical point for businesses evaluating PPA vs ownership: under a PPA, the developer owns the installation and therefore receives all SEG export income. As the site occupant, you have no entitlement to SEG payments. Over 20 years, this SEG income — which could be £20,000–60,000 on a 200kWp+ system — goes to the developer, not to your business.

This is one of several reasons why solar ownership (via green loan or asset finance) delivers substantially better long-term value than a PPA for most commercially profitable UK businesses with access to credit.

UK SEG supplier rates for commercial solar in 2026

Not all Smart Export Guarantee tariffs are equal. The scheme mandates that large suppliers offer at least one SEG tariff, but the rates differ enormously between suppliers — from the regulatory minimum of 2p/kWh up to variable Agile rates that average 12p–18p/kWh on good generation days. For a 200kWp commercial system exporting 40,000–60,000 kWh per year, the difference between the worst and best supplier is worth £4,000–£9,600 per year, or £80,000–£192,000 over a 20-year project life.

The table below reflects the principal SEG tariff products available to UK commercial solar operators in 2026. Rates change frequently — always confirm current rates directly with the supplier before switching.

OVO SEG tariff: what commercial solar operators need to know

OVO Energy's SEG tariff (sometimes called OVO SEG Export) sits in the mid-tier of the UK SEG market — paying more than minimum-compliance suppliers but typically below Octopus's best fixed or Agile rates. In 2026, OVO SEG rates have been running at 4p–6p/kWh on their standard export product. OVO offers an advantage if you already hold an OVO electricity supply contract, as export income can be offset directly against your supply invoice — simplifying administration for commercial premises with multiple meters.

To apply for OVO SEG as a commercial solar operator, you need an MCS-certified installation, a SMETS2 or equivalent smart export meter capable of half-hourly recording, and your export capacity must be within the licence parameters. Systems above 50kW on a G99 connection require export meter confirmation and are eligible under the SEG regulations.

How to maximise SEG income from a commercial solar installation

For most commercial solar operators, the single most impactful action is switching to a high-rate SEG supplier if you are currently on a minimum-compliance tariff (below 5p/kWh). The switch typically takes 4–8 weeks and requires no physical changes to the installation — just a meter data transfer and supplier application.