Net Metering UK: Rules, SEG & Business Benefits
We're not a law firm — we help you find the right legal support. For advice on your situation, speak to a legal adviser or find a solicitor.
If your business generates its own electricity from solar panels, wind turbines or another renewable source, you may be able to earn credit or payment for any surplus you send back to the grid. In the UK, this kind of arrangement sits within a wider framework that includes the Smart Export Guarantee (SEG), which replaced the older Feed-in Tariff scheme for new applicants.
Getting to grips with how export payments work, which suppliers offer them, and what your installation needs to look like can make a real difference to the payback period on any renewables project. This guide walks through what businesses in England and Wales should know before signing up, the practical steps involved, and the common questions that come up when organisations start generating their own power. It is written for business owners, facilities managers and finance teams who want a clearer picture before committing.
Overview
Net metering, in broad terms, describes the idea of measuring the electricity a property draws from the grid against the electricity it exports back, with the customer receiving some form of credit or payment for the surplus. In the UK, the arrangement most businesses will actually encounter is the Smart Export Guarantee, introduced in 2020.
Under the SEG, licensed electricity suppliers above a certain size are required to offer at least one export tariff to eligible small-scale generators. The rate per kilowatt hour exported, and whether it is fixed or variable, is set by each supplier rather than by the government.
True one-for-one net metering, where exported units fully cancel out imported units on your bill, is not how the UK system generally works. Instead, you pay your normal import rate for electricity drawn from the grid and receive a separate export payment for units sent back.
To take part, your generation equipment typically needs to be MCS certified (or equivalent) and you usually need a smart or export meter that can measure what you send to the grid accurately.
Key steps
- Assess your site and energy profile. Before installing any generation kit, look at how much electricity your business actually uses, when it uses it, and what roof space or land is available. A system sized to match your daytime demand tends to deliver better returns than one aimed purely at export, because self-consumption avoids the retail price of imported power.
- Choose an accredited installer and certified equipment. To qualify for the Smart Export Guarantee, your solar PV, wind, hydro, anaerobic digestion or micro-CHP installation generally needs to be certified under the Microgeneration Certification Scheme (MCS) up to 50kW, or meet equivalent standards for larger systems. Ask installers for written confirmation of certification before you sign a contract.
- Arrange an export-capable meter. You will normally need a smart meter operating in smart mode, or a dedicated export meter, so the supplier can measure the electricity you send back rather than estimating it. Contact your existing electricity supplier early to confirm what is installed and whether an upgrade or reconfiguration is needed.
- Compare SEG tariffs and apply to a licensee. SEG tariffs vary significantly between suppliers, with some offering flat rates and others paying more at times of peak grid demand. You do not have to take the export tariff from the supplier you buy your import electricity from, so it is worth comparing offers across the market before applying.
- Keep records and review annually. Once you are generating, keep copies of your MCS certificate, commissioning documents, meter readings and SEG contract. Review your export tariff each year when it comes up for renewal, as rates and contract terms change and a better deal may be available elsewhere.
Common questions
Q Is the UK Smart Export Guarantee the same as net metering?
Not quite. True net metering would allow exported units to directly offset imported units on your bill at the same price. The SEG instead pays you a separate per-kWh rate for electricity you export, while you continue to pay your normal import rate for what you draw from the grid. The economic effect can be similar, but the mechanics and rates are different.
Q Which renewable technologies are eligible?
The SEG covers solar PV, onshore wind, hydro, anaerobic digestion and micro combined heat and power, typically up to 5MW capacity (or 50kW for micro-CHP). Installations generally need to be MCS certified, or meet equivalent standards for larger systems. Suppliers may ask for proof of certification and commissioning before accepting your application.
Q Do I need a smart meter to receive export payments?
In most cases, yes. SEG licensees need half-hourly export data to pay you accurately, which usually means a smart meter operating in smart mode or a separate export meter. If you only have a traditional meter, your supplier will generally not be able to register you for an export tariff until this is resolved.
Q Can my business claim under the old Feed-in Tariff scheme?
The Feed-in Tariff closed to new applicants in March 2019. Existing FIT participants continue to receive payments under their original terms, but new installations commissioned after that date are directed towards the SEG instead. If you acquired a property with an existing FIT installation, check whether the benefits transfer with the system.
Q Are SEG payments taxable for a business?
Income from exported electricity is generally treated as business income and may be subject to corporation tax or income tax depending on your structure. VAT treatment can also apply. Tax rules change, so check the current position on gov.uk or with your accountant before relying on any particular treatment.
Q Can I switch SEG suppliers?
Yes. Your SEG export tariff is a separate contract from your import electricity supply, and you can shop around for the best export rate. Check the notice period and any exit terms in your current SEG contract, and make sure your new supplier can access the relevant meter data before switching.
Q What happens if my installation is larger than 5MW?
Installations above 5MW fall outside the SEG and typically trade their output through commercial power purchase agreements (PPAs) with energy suppliers or traders. The terms are negotiated directly and can include fixed prices, market-linked rates, or a combination. This is a more complex route that usually justifies tailored commercial input.
Sources
This guide is based on primary UK law and official guidance.
- Guidance · UK GovOfgem – Smart Export Guarantee (SEG)ofgem.gov.uk
- Official SourceMicrogeneration Certification Scheme (MCS)mcscertified.com
- Guidance · UK Govgov.uk – Feed-in Tariff scheme guidancegov.uk
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.