What SEG is and why it matters
The Smart Export Guarantee (SEG) is the UK government scheme requiring licensed electricity suppliers to pay generators for electricity exported to the grid from solar PV (and other small-scale renewables). All UK PV systems up to 5 MWp installed capacity are eligible, and every major UK supplier offers at least one SEG tariff.
For office solar installations, SEG revenue typically contributes 5-10% of total annual benefit. The bigger driver is avoided-cost from self-consumption (worth 25-40p per kWh self-consumed). But for the 15-30% of generation that exports to grid, SEG tariff selection materially affects total economics.
The 2026 tariff landscape
Best-value SEG tariffs in 2026 (as of May):
| Supplier | Tariff name | Rate | Notes |
|---|---|---|---|
| Octopus Energy | Outgoing Agile | ~10-13p avg | Variable, tracks day-ahead wholesale prices |
| Octopus Energy | Outgoing Fixed | ~9p | Flat-rate fixed |
| E.ON Next | Export Exclusive | ~10p | E.ON Next import customers only |
| OVO Energy | Plus Export | ~8p | Available to OVO import customers |
| EDF Energy | Solar Export Premium | ~7p | Available to EDF business customers |
| British Gas | Solar Reward | ~6.5p | Open to all UK PV customers |
| ScottishPower | Smart Export | ~5p | Lowest of major suppliers |
Note that not all SEG tariffs are open to all customers. Some require an existing import contract with the same supplier; others are available standalone. The cheapest import tariff plus the cheapest export tariff isn’t always optimal — bundle pricing matters.
How to think about tariff choice
Three considerations matter for tariff selection on commercial office installs:
1. Total bundle economics (import + export). Some suppliers offer competitive export rates but expensive import rates. The real question is total annual cost per kWh net of solar generation. Run the maths on a per-supplier basis, not export tariff alone.
2. Self-consumption ratio. If your self-consumption is high (80%+), export revenue is a small absolute number. Going from 7p to 12p export tariff might be worth £2-5k/year. Worth doing, but not the dominant decision.
3. Variable vs fixed. Octopus Agile-style variable tariffs pay above fixed-rate when wholesale prices are high (mid-afternoon weekdays) and below when low (late at night). For Mon-Fri office buildings, the bias is toward variable being better because export tends to happen during high-price hours.
Worked example
A 320 kWp office system in Birmingham generating 294,000 kWh/year at 78% self-consumption exports 65,000 kWh/year.
| Tariff | Rate | Annual revenue |
|---|---|---|
| ScottishPower (5p) | 5p | £3,250 |
| British Gas (6.5p) | 6.5p | £4,225 |
| OVO (8p) | 8p | £5,200 |
| Octopus Outgoing Fixed (9p) | 9p | £5,850 |
| E.ON Next Exclusive (10p) | 10p | £6,500 |
| Octopus Outgoing Agile (12p avg) | 12p | £7,800 |
Range across tariffs: £3,250 to £7,800 — £4,550/year of variation. Over 25 years that’s £114k of cumulative difference. Worth getting right.
Practical recommendation
For most UK commercial office customers, the practical recommendation is:
- Octopus Outgoing Agile if you’re willing to manage variable tariff pricing (most useful for office hours generation profile)
- Octopus Outgoing Fixed if you prefer predictable revenue
- E.ON Next Export Exclusive if you’re already an E.ON Next import customer
- OVO Plus Export if you’re an OVO import customer
Avoid the lowest-rate offers from British Gas, EDF, and ScottishPower unless you have a specific reason (existing contractual relationships, particular service requirements).
We register the SEG tariff as part of the commissioning process. Customers can switch SEG tariff annually if better deals emerge.
Request a feasibility study with full annual economics including SEG revenue.
How SEG revenue is calculated: the mechanics
SEG revenue is straightforward to calculate but requires accurate export metering to avoid disputes. The formula is:
Annual SEG revenue = Annual exported kWh x SEG tariff rate (p/kWh) / 100
For the calculation to be accurate, three conditions must be met:
1. Export metering. All commercial solar systems must have an export meter installed and registered with the SEG licensee. The meter measures electricity flowing from the building to the grid at the connection point. Electricity self-consumed in the building never appears on the export meter and is not paid at SEG rates.
2. Half-hourly settlement (Agile tariffs). Octopus Outgoing Agile pays different rates for each half-hourly settlement period based on day-ahead wholesale prices. The rate is settled retrospectively after each period closes. Generation at 11am on a sunny Tuesday typically commands 12-18p/kWh under Agile; generation at 3am on a windy Sunday may command 2-4p/kWh (though offices generate nothing at 3am). For Mon-Fri office buildings, the net effect of Agile pricing is generally positive versus fixed-rate.
3. MPAN registration. Each export metering point has a Meter Point Administration Number (MPAN) registered with the SEG licensee. The MPAN links the generation site to the SEG tariff contract. Commissioning documentation should confirm MPAN registration is complete before the first export occurs.
SEG rates for business customers vs residential
Commercial solar customers are eligible for the same SEG tariffs as residential customers — the scheme does not distinguish by customer type. However, three practical differences affect commercial customers.
Business electricity accounts. Some SEG licensees link SEG export to the business’s existing electricity import account. Octopus Business customers access SEG via their existing business account; the export payment appears on the same bill as import charges (as a credit).
VAT on SEG payments. For VAT-registered businesses, SEG payments are subject to VAT (currently 20%). SEG income is treated as taxable income for corporation tax purposes and should be included in the company’s energy cost savings calculations accordingly. The net-of-tax SEG rate for a 25% corporation tax payer receiving 12p gross SEG income is approximately 7.2p net.
Half-hourly mandatory metering threshold. Businesses above the half-hourly mandatory metering threshold (approximately 100,000 kWh/year) will already have half-hourly meters installed. These meters automatically capture the half-hourly export data required for Agile-style tariffs — no additional meter upgrade is needed.
Quarterly vs annual payment: cash flow implications
SEG payments are typically made quarterly (four times per year) in arrears. For larger commercial systems generating significant export, the timing matters.
Under quarterly payment, a 300 kWp system exporting 65,000 kWh/year at 12p/kWh generates approximately 7,800/year or 1,950/quarter. Payment arrives approximately 6-8 weeks after each quarter end.
Some providers (including Octopus) offer monthly payment for business accounts above threshold generation levels — reducing the average cash-flow lag from 5-7 weeks to 2-3 weeks. For large systems where SEG revenue represents 5,000+/year, monthly payment is worth requesting.
Annual payment options also exist at some providers, typically with a small premium over quarterly rate. These are occasionally used for simplified accounting but are less cash-flow optimal than quarterly or monthly.
How SEG interacts with PPA
For buildings on Power Purchase Agreements (PPAs), the SEG structure changes materially.
Under a standard commercial PPA, the PPA provider (not the building owner) owns the solar system. The PPA provider is therefore the SEG-eligible generator — and the SEG tariff revenue accrues to the PPA provider, not the building occupier. This is a common source of confusion in PPA negotiations.
Well-negotiated PPA contracts typically include one of three approaches to SEG revenue:
1. SEG revenue to PPA provider. Simplest structure. Building owner has no SEG involvement. PPA tariff reflects this (lower tariff) or not (PPA provider keeps SEG upside).
2. SEG revenue shared (split formula). Building owner receives a portion (typically 30-50%) of SEG revenue in addition to the reduced PPA tariff. This is a minority of PPAs but has been negotiated on some larger commercial arrangements.
3. SEG revenue credited against PPA tariff. Annual SEG revenue is deducted from annual PPA payments. Building owner effectively captures SEG benefit through lower effective PPA rate.
Always clarify the SEG treatment in any PPA contract — failure to do so leaves material revenue unaddressed in a 15-25 year contract.
The SEG registration process
SEG registration is handled by the installer as part of the commissioning process. The steps:
-
MCS certificate issued. All eligible PV systems must have an MCS installation certificate. This is issued by the MCS-certified installer at commissioning and registered on the MCS national database.
-
Export MPAN confirmed. The DNO issues an export MPAN at G99 connection approval. This number is required for SEG registration.
-
SEG application submitted. The installer or customer submits application to the chosen SEG licensee, providing MCS certificate number, export MPAN, installation address, and system capacity. Most licensees have online application portals with 5-10 working day processing times.
-
Smart meter confirmation. SEG licensees require a smart meter (SMETS2 or half-hourly meter for commercial customers) to settle export payments. Most commercial premises already meet this requirement.
-
First payment. First SEG payment typically arrives 6-8 weeks after registration, covering export from registration date.
We handle SEG registration as a standard part of commissioning handover on all systems we deliver. Customers can switch SEG supplier annually if better tariffs emerge — the switching process takes approximately 4 weeks.
Realistic SEG revenue modelling over 25 years
SEG tariffs are not guaranteed in perpetuity — the scheme runs on a licensee obligation basis and tariff rates can change. However, two structural factors support continued SEG value:
Electricity market pricing. SEG rates are broadly linked to wholesale electricity prices. As UK wholesale prices evolve (generally upward in real terms over the long run), SEG rates are likely to follow. Octopus Agile tariffs already demonstrate real-time wholesale linkage.
Policy continuity. The SEG scheme replaced the FIT export tariff regime and has Government commitment through the current Parliament. Abolition would be politically contentious given the installed base.
A conservative 25-year SEG revenue model uses a fixed 8p/kWh rate (real terms), declining slightly toward end of contract as self-consumption rises (battery storage additions typically reduce export volume over time). Over 25 years, total SEG revenue on a system exporting 65,000 kWh/year (320 kWp system at 78% self-consumption): approximately 130,000 in nominal terms (9,500-11,000/year depending on tariff evolution).
SEG is a valuable secondary revenue stream but represents only 10-15% of total annual benefit for a well-optimised commercial office system. Maximising self-consumption remains the primary economic priority.
Key takeaways
- SEG revenue is calculated as exported kWh x tariff rate; accurate export metering is essential
- Best 2026 rates: Octopus Outgoing Agile (10-13p average for Mon-Fri office profile), Octopus Outgoing Fixed (9p), E.ON Next Export Exclusive (10p for E.ON import customers)
- Tariff choice is worth up to 4,500/year on a 300 kWp system — worth optimising but not the dominant economic driver
- PPA contracts require explicit SEG treatment — many default to PPA provider keeping SEG revenue unless negotiated otherwise
- VAT-registered businesses should calculate net-of-tax SEG income when building financial models
- We handle SEG registration as part of commissioning; customers can switch tariff annually as market evolves