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The Smart Export Guarantee (SEG) is the principal market mechanism in Great Britain for small generators to be paid for electricity they export to the grid. Rather than a central subsidy, SEG requires eligible licensed electricity suppliers to offer export tariffs to small-scale generators, allowing households and community projects to sell exported generation at an agreed tariff. The scheme is supplier-driven, so terms, payment rates and the metering requirements vary between providers.
In practice SEG receipts are typically modest and variable. Export tariffs are set by suppliers and reflect wholesale conditions and administrative costs; they are not the same as long-term contracted revenue from corporate or sleeved PPAs. For projects that can reliably stack revenue streams (for example, on-site consumption, export payments, and occasional wholesale sales), SEG can be a complementary component of overall returns rather than the primary revenue source.
Technical and contractual details matter. Accurate measurement of exported energy (metering and data-agency arrangements), eligibility criteria and contract notice periods affect cashflow timing. Where a project has access to larger offtakers or aggregators, alternative routes such as direct PPAs or participation through an aggregator can offer different risk/reward profiles compared with SEG-only arrangements.
For retail fractional investors, SEG is important background: it helps explain the lower-revenue, lower-administration route for small rooftop and community assets. When evaluating fractional offerings, investors should expect clear disclosure of the expected SEG assumptions, the counterparty offering the export tariff, and how export payments are collected and distributed among fractional owners.