Smart Export Guarantee — what it pays, what's changed in 2026, and how to capture the best rate.

How the Smart Export Guarantee works

The Smart Export Guarantee is not a grant. It is a statutory tariff payable for electricity you generate from MCS-certified solar PV (or other low-carbon sources) and export to the grid. It replaced the Feed-in Tariff in January 2020. The mechanism: Ofgem-licensed electricity suppliers with more than 150,000 customers (the major UK retailers — Octopus, EDF, British Gas, E.ON, Scottish Power, OVO, Shell, etc.) are required to offer at least one SEG tariff. They publish the rate, you sign an export contract, and they pay you for every exported kWh as recorded by a smart meter capable of half-hourly export readings.

SEG is independent of your import supply. You can hold import with one supplier and export under SEG with another. This is important — the SEG-best supplier for your site is rarely the same as your import supplier, and switching only your export contract is a 14-day no-cost change.

Flat-rate vs dynamic tariffs

The two structural categories of SEG tariff:

Flat-rate SEG (5–18p/kWh)

Pays a fixed pence/kWh on all exported electricity, irrespective of when the export happens. Simple, predictable, and the dominant commercial structure since SEG launched. Best 2026 commercial flat rates: Octopus Energy SEG (~15p), EDF Export Standard (~12p), British Gas SEG (~6.4p variable), OVO (~5.5p basic). Suitable for sites with predictable daytime export profiles and limited active management capability.

Dynamic SEG (variable, 25–40p/kWh peak)

Pays a half-hourly variable rate that tracks wholesale electricity prices. The rate is published 24 hours ahead. During system peaks (typically winter evenings 4-7pm) the rate has hit 40p+/kWh; during overnight surplus periods it can fall to negative pricing. Examples: Octopus Outgoing Agile, EDF Export Variable. Suitable for sites with battery storage that can shift exports into peak hours, or commercial sites with naturally peak-aligned generation.

For a commercial site with battery storage cycling once per day, the difference between flat 8p and dynamic averaging 14p over the year is roughly £12,000 of additional annual revenue per 200 kWh of battery storage. Over a 25-year system life that's £350,000+ of cumulative differential — material on most projects.

Why SEG matters more in 2026 than it did three years ago

Three reasons:

1. The major direct grants closed. IETF Phase 3 closed after Spring 2024; PSDS Phase 4 closed November 2024; UKSPF closed March 2026. SEG is now a larger relative contributor to total project economics.
2. Dynamic tariffs matured. Octopus Outgoing Agile launched in 2022 but became commercially competitive around 2024. The price spreads on dynamic tariffs are now wide enough to make battery storage clearly NPV-positive on most commercial sites.
3. Wholesale electricity prices are structurally higher. The 2022 wholesale spike has receded but prices remain materially above the 2018-21 baseline. SEG tariffs (which track wholesale) have followed.

SEG and commercial battery storage

SEG and battery storage are now the dominant pairing on UK commercial solar. Here's why: a commercial site without storage typically self-consumes 65–80% of its solar generation; the remaining 20–35% exports at whatever SEG rate applies. With a properly-sized battery (typically 0.4–0.8 kWh per kWp of PV), self-consumption rises to 85–92%, AND the battery can shift export into peak SEG windows. The combined effect on annual revenue is typically £15–£30 per kWh of battery capacity per year.

For a 500kWp solar + 200kWh battery commercial site, the SEG + storage uplift over solar-only is £4,000–£6,000/year. Combined with grid-services revenue (Balancing Mechanism, Demand Flexibility Service), some sites add £8,000–£15,000/year of incremental battery revenue. See our battery analysis.

Practical SEG sign-up checklist

1. Confirm MCS certificate is in your business name. SEG requires the certificate. If your installer registered it in their name, ask for a transfer or replacement.
2. Confirm smart meter capability. SMETS2 commercial export meters are required. Some sites need an upgrade — usually free.
3. Compare supplier tariffs against your demand profile. Highest-paying flat rates win for stable daytime profiles. Dynamic tariffs win for sites with battery storage. See our supplier comparison.
4. Sign the SEG contract directly with the chosen export supplier. Switching only export takes ~14 days; import stays where it is.
5. Receive payments quarterly against half-hourly export readings.

SEG and the broader 2026 commercial solar funding stack

SEG sits alongside Full Expensing, 0% VAT, REPF, and PPAs in the active 2026 commercial solar funding stack. Each contributes a different revenue or cost-saving line:

• Full Expensing — capex relief (25% of capex back via tax)
• 0% VAT — capex reduction (~17% of VAT-inclusive cost)
• SEG — recurring revenue (£400–£15,000+/year depending on system size)
• PPA route — alternative zero-capex structure
• REPF — capex grant (rural businesses only)

Together these deliver 4–6 year payback on most UK commercial solar projects without depending on any closed grant.