What is the Smart Export Guarantee and how does it work?
The Smart Export Guarantee (SEG) is a government initiative designed to encourage the generation of renewable energy by small-scale producers, such as homeowners with solar panels. It allows these producers to sell excess electricity back to the national grid, providing an opportunity to earn money from their renewable energy installations. This scheme not only benefits the individual producers but also supports the wider transition to a more sustainable energy system.
Implemented in January 2020, the SEG replaced the previous Feed-in Tariff scheme and is applicable to various renewable energy sources, including solar, wind, and hydro. It operates by requiring certain licensed electricity suppliers to offer tariffs to small-scale energy producers. By participating in the SEG, producers can gain financial rewards while contributing to the reduction of carbon emissions and enhancing the resilience of the energy grid.
The Smart Export Guarantee functions by obliging electricity suppliers with over 150,000 customers to provide at least one tariff for small-scale producers. These tariffs are set by the suppliers and can vary, offering either fixed or variable rates. Producers are paid for every unit of electricity they export to the grid, measured in kilowatt-hours (kWh). The scheme is designed to be flexible, allowing producers to choose a tariff that best suits their needs and to switch providers if a more attractive offer becomes available.
To participate, eligible producers must ensure their renewable energy installations are certified under the Microgeneration Certification Scheme (MCS) or an equivalent standard. Additionally, they need a smart meter to accurately measure the electricity exported to the grid. This requirement ensures that the energy contribution is reliably recorded and compensated accordingly.
The SEG plays a crucial role in promoting renewable energy usage by providing a financial incentive for individuals and businesses to generate their own power. By facilitating the interaction between small-scale producers and the national grid, the SEG helps to decentralise energy production, reduce reliance on fossil fuels, and pave the way toward a more sustainable future.
