Smart Pay Energy withdrew from the Smart Export Guarantee (SEG) during SEG Year 3, which ran from 1 April 2022 to 31 March 2023, and was no longer participating by the end of the year, according to Ofgem's SEG annual report published in September 20231. The supplier had been a voluntary licensee at the start of the year1.
Ofgem states that the withdrawal was contrary to the terms of SEG policy, and that the supplier therefore did not submit data as required1. The regulator says the incident will be added to the Supplier Performance Report1.
"The supplier Smart Pay Energy was a voluntary licensee at the start of SEG year 3 but contrary to the terms of the SEG policy, withdrew and were no longer participating at the end of the SEG year."
Under the scheme rules set out in the same report, a voluntary SEG licensee is a licensed electricity supplier with fewer than 150,000 domestic electricity customers that chooses to offer a SEG tariff, while mandatory licensees are those with at least 150,000 domestic electricity customers1. A voluntary licensee has the same responsibilities as a mandatory licensee and must comply with all SEG obligations, but can withdraw at the end of a SEG year1. Ofgem's report states that licensees are obligated to participate for the full SEG year1.
The SEG requires suppliers to pay small-scale low-carbon generators for electricity exported to the National Grid, at a rate above 0p/kWh at all times1. Across Year 3, 39 tariffs were provided or offered by 14 SEG licensees1. The highest rate available was Octopus's bundled "Tesla Outgoing July 2022 v1" tariff at 25.48p/kWh, available only to solar photovoltaic customers who installed a Tesla Powerwall; the highest unbundled tariff was ScottishPower's "SMART GEN" at 12p/kWh1. The lowest tariff offered was from the supplier E at 1p/kWh1. The average rate for installations registered during the year was 8.77p/kWh, a fall of almost 28% from Year 21.
| SEG Year 3 measure | Figure |
|---|---|
| Installations registered | 92,946 |
| Combined capacity | 495,981 kW |
| Payments to generators | £7,193,527 |
| Electricity exported | 77.3 GWh |
| Tariffs offered or in use | 39, from 14 licensees |
Source: Ofgem SEG Annual Report1. Ofgem notes that anonymised licensee data means installations switching tariff during the year are double counted1.
Why it matters for households
For a household with solar panels or another eligible generator, the SEG is the route by which exported electricity is paid for, so the standing of the supplier paying that tariff matters. A supplier leaving the scheme mid-year removes one of the parties a household might have signed up with, and the report does not say what happened to the payments or registrations of any generators affected; that has not been reported1. The report also does not state how many customers or installations Smart Pay Energy held1.
The wider figures show a market where rates vary widely between suppliers and between bundled and unbundled offers, and where the average rate paid to newly registered installations fell by almost 28% year on year1. For a home weighing up export tariffs, the spread between the 1p/kWh low and the 25.48p/kWh high in Year 3 is the practical context, alongside the eligibility rules covering MCS certification and capacity limits of 5 megawatts, or 50kW for micro-CHP1.
What happens next
Ofgem states the Smart Pay Energy incident will be added to the Supplier Performance Report1. No date for that addition is given in the report, and no further action against the supplier is described1.
Sources1 cited
- Smart Export Guarantee (SEG) Annual Report, ofgem.gov.uk