How Smart Meters and SEG Solar Export Work (London Guide)

The Smart Export Guarantee (SEG) replaced the Feed-in Tariff in 2020 for new solar installations. To be paid for export, you must have a SMETS2 smart meter capable of half-hourly export readings. Without it, your supplier cannot quantify how much electricity left your home and there is no SEG payment.

In London, the vast majority of homes are now SMETS2-fitted. If you still have an analogue meter or a SMETS1 in dumb mode, you will need a free smart meter upgrade before SEG payments can start. Lead times in 2026 are 4–10 weeks depending on supplier and area.

A solar install commissioned without a SMETS2 export-capable meter still works — you self-consume what you generate — but every kWh exported to the grid is given away for free until the meter is upgraded. For a 4kW system on a London roof, that is roughly £180–£260 of lost income per year on flat tariffs and considerably more on the better time-of-use plans.

Half-hourly settlement (HHS) became mandatory for domestic electricity suppliers in 2025. Your smart meter reports both import and export readings every 30 minutes. Settlement against the wholesale market happens in the same half-hour blocks.

For solar owners, HHS is the enabler of time-of-use export tariffs. Suppliers can pay higher rates during peak wholesale hours (typically 4–7pm in winter, midday spikes in summer when demand is high but cloud has clipped large-scale solar) and lower rates overnight.

For battery owners, HHS is transformative. A 5kWh battery can charge from cheap overnight import (sometimes at negative prices on Octopus Agile) and discharge to grid at peak export rates. The economic case for residential batteries shifted decisively positive once HHS rolled out.

Octopus Flux is a combined import/export tariff with three time bands. Off-peak import (02:00–05:00) is typically 12–18p/kWh; peak export (16:00–19:00) is typically 24–32p/kWh; standard slots fall in between. For a battery-equipped home in London, Flux pays out roughly £350–£550 per year net better than flat SEG on a 4kW + 5kWh setup.

Octopus Outgoing Fixed is a flat 15p/kWh export rate. The simplest model — no time bands, no smart-app games. Good for solar-only homes without batteries that export mostly in the middle of the day when wholesale is low anyway.

British Gas Export & Earn, E.ON Next Export Exclusive, and Good Energy Solar Savings sit in the 4.5–7.5p/kWh band on flat rates as of 2026. Useful if you cannot or will not switch import supplier — most SEG payers require you to also import from them — but materially worse than the Octopus options.

EDF, Ovo and Scottish Power have export rates in the 3–5p/kWh band. Realistically, any sub-5p tariff in 2026 is a loss-leader for the supplier and a giveaway by the customer.

For battery-equipped homes, Octopus Flux remains the strongest pound-for-pound deal. The time-of-use upside more than offsets the marginally lower off-peak import compared to Octopus Go.

For solar-only homes (no battery) with strong daytime generation, Octopus Outgoing Fixed at 15p/kWh is hard to beat. The flat rate captures the genuine wholesale value of midday export without the complexity of three-band scheduling.

For homes that need a single-supplier dual-fuel deal and cannot move import supplier, E.ON Next Export Exclusive (around 7.5p/kWh in 2026) is the most defensible flat-rate option. British Gas Export & Earn pays similar.

The supplier that pays best depends sharply on your battery, your roof aspect, and your usage shape. Run actual numbers against your last 12 months of generation before switching.

SEG and import supply are legally separable — you can be on Octopus Flux for export and a different supplier for import. In practice, the best tariffs require you to also import from the same supplier, and the operational simplicity of single-supplier billing is worth a few pence either way.

Switching SEG provider takes 5–21 working days depending on the receiving supplier. There is no exit fee on standard SEG contracts. Smart meter readings transfer automatically; you do not need to take manual readings.

A common trap: switching import supplier to one that does not offer SEG (some smaller resellers still do not) and finding your export payments stop. Confirm the new supplier supports SEG before switching, and ideally signs you up at the same time as import.

SEG payments to a residential homeowner are tax-free up to the Property Allowance of £1,000 per tax year. For a typical 4kW London system, annual export income is in the £180–£550 range, comfortably under the allowance.

Where annual export income exceeds £1,000 — larger systems, multi-array installs, or aggressive battery arbitrage — the excess is taxable as miscellaneous income and must be declared on self-assessment. HMRC has explicit guidance on this; the £1,000 allowance is the cleanest path for most.

Landlords letting a property with solar receive export income that is treated as rental-related income for tax. That changes the calculus — the income is taxable from the first pound for higher-rate landlords. It also affects the EPC point allocation for MEES compliance, which is a separate but related upside.

Until 1 May 2027, the installation of solar PV, battery storage and heat pumps to residential properties carries a 0% VAT rate. For a 4kW solar + 5kWh battery package quoted at £11,500 inclusive, that is a saving of £1,917 compared to the standard 20% rate that resumes from May 2027.

The 0% rate applies to the supply AND installation when invoiced together by the installer. Buying the panels separately from a wholesaler and paying a different contractor for the install loses the relief on the goods element — a common mistake when DIYing the supply chain.

The relief covers ancillary works that are integral to the install — inverter, mounting rails, DC and AC isolators, generation metering, cabling from the array to the consumer unit. It does not cover separate roof works, scaffolding-only contracts, or interior decoration disturbed by the install.

Landlords benefit from the same 0% rate when installing solar or batteries on rented residential property, though the rental-income treatment of any export income remains as before. Plan installs to land before 1 May 2027 to capture the relief on capital cost.

Smart meter in 'dumb mode' after a switch. Some older SMETS1 meters lose communication when the customer switches supplier — they continue working as a basic meter but stop sending half-hourly data. SEG payments stop until the meter is updated or replaced. Check your in-home display: if it is blank or only showing basic usage, call your supplier.

Export readings not being captured. Most SMETS2 meters need the supplier to actively enable export reading after a solar install. The installer should request this at commissioning; verify with the supplier within 14 days that export readings are flowing. Without active export reading, you generate but you are not paid.

MCS certificate missing. The Microgeneration Certification Scheme certificate is the SEG eligibility document. Without it, no supplier will pay you. The installer issues the MCS certificate at commissioning; keep the PDF safe and supply a copy to your SEG provider at sign-up.

G98/G99 notification not filed. The DNO requires notification of any generation installed at the property. G98 (under 16A per phase) is filed within 28 days of commissioning by the installer; G99 (above 16A per phase) requires advance approval. An unfiled G98 will not stop SEG payments but will surface at the next DNO interaction and cause a record-keeping headache.

Mismatched address on the SEG account. The smart meter's registered installation address must match the SEG account address exactly — including capitalisation and abbreviations. A common source of stuck SEG sign-ups in London is flats where the SEG application uses 'Flat 4' and the meter is registered as 'Apartment 4' or vice versa. Fix the meter address with the import supplier first, then re-submit the SEG application.