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The Smart Export Guarantee (SEG) requires certain licensed electricity suppliers to offer payments to small-scale generators for exported electricity. SEG tariffs are set by suppliers and vary in price and structure; eligibility and metering requirements determine whether exported energy qualifies. Ofgem provides the regulatory framework and oversight to ensure suppliers meet SEG obligations and publish tariff information.
Beyond SEG, small solar generators can sell exported energy via contractual arrangements with suppliers, aggregators or through route‑to‑market services that enable participation in wholesale or local flexibility markets. These routes differ in administrative complexity, settlement timing and credit exposure; using an aggregator may open access to flexibility markets but introduces an extra counterparty and fee layer.
Accurate measurement of exported energy is central. Smart meters or export meters that meet market measurement standards are typically required to verify volumes and avoid disputes. Payment frequency and lag (for example, monthly vs quarterly settlement) affect cashflow predictability.
For retail investors looking at fractional exposure to rooftop solar, it is useful to understand which revenue streams underpin returns (SEG tariff vs merchant routes), how export volumes are measured and settled, and the counterparty profile for buyer arrangements. Transparent disclosure about the chosen revenue route and metering approach helps investors assess income stability and operational risk when considering fractional shares in small-scale solar projects.