SEG tariffs under review: How have they changed in their first two years amidst market turmoil

With power prices in Britain remaining high, Octopus Energy recently increased its smart export guarantee (SEG) tariff to 7.5p/kWh, topping the tariffs on offer.

Suppliers with more than 150,000 domestic customers were required to launch an export tariff on or before 1 January 2020. At the time Social Energy offered the highest tariff at 5.6p/kWh, closely followed by Octopus Energy at 5.5p/kWh.

Since then there has been a lot of change in the energy supply sector, driven largely by supplier collapses due to rising wholesale power prices. In 2021, gas prices increased by around 500% but due to the price cap unhedged suppliers were not able to increase bills to cover these costs. This squeeze led to 27 energy suppliers collapsing, as well as Bulb going into special administration.

While most of these suppliers were too small to be obliged to offer a SEG tariff, it has had a knock-on impact on the SEG tariffs on offer, and the rates.

Most notably, Social Energy Supply – which topped the chart in 2020 despite not being obligated to launch a tariff – shuttered in November. Prior to this, the company had increased its SEG tariff beyond its initial rate including announcing an export tariff offering of 20p/kWh for the first 1,000kWh exported per year, with this then dropping to an uncapped rate of 6p/kWh in June 2021.

Speaking to Solar Power Portal’s sister site Current±, Social Energy co-founder Julian Wiley said the closure “was a simple commercial decision for our business".

“It was cheaper to exit from being a supplier than take the loss. I'm not going to say anything wrong about Ofgem, but there is something seriously wrong with a market that puts you in that predicament.”

Whilst the company is continue as a solar and battery storage operator, exiting the supplier market means it no longer offers SEG tariffs, and its customers were taken on by British Gas in November.

The only other supplier that originally offered a SEG tariff to have subsequently collapsed is Green Network Energy, which became one of the first to shutter last year. Its customers were subsequently absorbed by EDF through the Supplier of Last Resort (SoLR) mechanism.

In January 2020, just weeks after the SEG was brought in, OVO Energy completed the acquisition of SSE’s GB household energy business. As such it took on all of the company’s SEG customers, but there are still two separate licences under the different brands, and as such two rates. SSE customers have a tariff of 3.5p/kWh, while OVO customers have 4p/kWh.

With the launch of E.ON Next in March 2020 by Big Six provider E.ON, following the acquisition of Innogy and with it its npower customer base, the SEG tariffs on offer from E.ON have been renamed, however their rate has stayed the same. Fix & Export Exclusive is now called Next Export Exclusive, and Fix & Export is Next Export.

The majority of the SEG tariffs on offer have remained at a steady rate over the last two years, or seen moderate increases. Speaking to Solar Power Portal about the potential of increasing the tariffs in line with higher power prices, most suppliers simply noted that they keep their SEG tariff under constant review.

“We are currently reviewing our SEG tariff offering and look forward to increasing this for our customers soon,” said a spokesperson for Utilita, for example.

The SEG tariffs on offer currently include: