SEG, PPAs and the rise of symmetric pricing.

Layer 1. The Smart Export Guarantee

The Smart Export Guarantee launched in January 2020 to replace the closed Feed-in Tariff. Administered by Ofgem, it requires every licensed electricity supplier with more than 150,000 domestic customers to offer at least one export tariff to small-scale low-carbon generators, solar PV, wind, hydro, anaerobic digestion and micro-CHP up to 5 MW (50 kW for micro-CHP).

SEG is a regulatory floor, not a price. Suppliers must offer something, the rate must be greater than zero at all times, and the generator needs an export-capable smart meter. Beyond that, the rate, the structure (fixed or variable) and the contract length are entirely up to the supplier. That is why headline rates range from around 3p/kWh at the bottom of the market to 15–16.5p/kWh at the top.

Layer 2. Supplier SEG products

Each supplier's actual export tariff is a product wrapped around the SEG obligation. Octopus Outgoing, E.ON Next Export Exclusive and Good Energy Solar Savings are all SEG tariffs, different brand names for the same regulated mechanism. The variations matter:

• Fixed vs variable. Octopus Outgoing Fixed pays a flat rate per exported kWh. Octopus Agile Outgoing pays a half-hourly variable rate tracking day-ahead wholesale prices. Both are SEG; the second exposes you to the time-of-export value of your electrons.
• Bundled vs standalone. Several of the highest published rates require you to also buy your import electricity from the same supplier. Good Energy's Solar Savings is one of the few historically open to standalone export customers.
• Smart meter and DNO sign-off. Every SEG tariff requires a SMETS2 (or compliant SMETS1) meter and G98/G99 approval from your Distribution Network Operator. Without both, no supplier can pay you.

Layer 3. Commercial Power Purchase Agreements

Above 5 MW, and often well below, for any installation that wants to negotiate seriously, you leave SEG behind and enter the world of bilateral Power Purchase Agreements. A PPA is a private contract between a generator and an off-taker: a supplier, a utility, or sometimes a corporate buyer directly. The legal framework is entirely different.

• Term. Typically 1–15 years, against SEG's effectively month-to-month posture.
• Price structure. Fixed, indexed to wholesale, floor-plus-share, or CfD-style. PPAs are the natural home for hedging.
• REGO certificates. The Renewable Energy Guarantee of Origin is the green-attribute certificate. PPAs almost always specify whether REGOs transfer with the power or are retained by the generator, often 5–15% of the total value.

A clean mental model: SEG is the consumer-protection floor for small generators. PPAs are the open market for serious volume. The boundary at 5 MW is regulatory rather than technical.

The fourth idea, symmetric pricing

Every SEG tariff and most PPAs share one assumption: import and export are priced separately. You pay one number when you buy from the grid; you receive a smaller, unrelated number when you sell back. The gap between those numbers is the supplier's spread, and for a typical UK household it sits somewhere between 15p and 25p per kWh.

Octopus Flux, launched in February 2023, was the first widely available UK domestic tariff to attack that spread directly. The structure is unusual: the day is split into three time bands, and in each band, the import rate and the export rate are set together, cheap to buy and cheap to sell overnight, expensive to buy and expensive to sell at peak.

The spread is not zero, but it is symmetric in shape: roughly 7p across the whole day in either direction. That changes the household's incentive completely. Instead of being paid one price and charged another regardless of timing, you are now arbitraging the grid alongside Octopus. Charge a battery at 17p, sell back at peak for 30p, and the home behaves like a micro-utility.

A second product, Intelligent Octopus Flux, goes further: you cede direct control of the battery to Octopus, and in return the platform optimises charge and discharge against wholesale signals on your behalf. Symmetry plus delegation.

Is Octopus really the first?

Honest answer: first at meaningful scale, yes; first ever, with caveats. Several supplier-side experiments offered time-of-use export pricing before Flux launched in February 2023, the Powervault and Open Energi DSR pilots, various Agile Outgoing combinations, but none packaged import and export onto a single coordinated schedule and offered it as a standard retail tariff to any solar-plus-battery customer in the country.

Flux was also genuinely first in the design pattern that matters: pricing the two directions on the same clock, with the same shape, so that a household optimising for one signal automatically optimises for the other. That is the structural innovation. Competitors have since moved in the same direction. E.ON Next, Good Energy and others have added time-of-use export variants, but Flux set the template.

Footnote for readers checking dates in 2026: Octopus paused new sign-ups to standard Flux in March 2026 while it consolidates the product line behind Intelligent Flux. Existing customers remain on the tariff. The structural argument below does not depend on the specific product staying open.

Why symmetric pricing matters

A decentralised grid only works if the prosumers at the edge, households with solar and batteries, EV fleets, small commercial sites, respond to the same price signals the system operator is responding to. Asymmetric pricing breaks that loop. When you are paid 5p for export and charged 30p for import, the rational behaviour is to self-consume aggressively and ignore what the wider grid needs at any given moment. Multiply that across millions of homes and you get exactly the wrong outcome: batteries full when the grid is screaming for discharge, batteries empty when the grid has surplus wind.

Symmetric, time-coupled pricing fixes the incentive. If peak export pays 30p because peak demand is real, then every battery on the network has a financial reason to discharge into that moment. The household and the system operator are now solving the same optimisation problem with the same numbers. That is what a functioning decentralised market looks like.

The point of a symmetric tariff is not the rate. It is the alignment.

What it requires of the grid

• Half-hourly settlement everywhere. Ofgem's Market-wide Half-Hourly Settlement programme is the precondition. Without it, suppliers cannot price half-hours differently because they are not billed for half-hours differently themselves.
• Distribution-level visibility. A DNO needs to know, in close to real time, what is flowing on each feeder. Otherwise a symmetric tariff that successfully signals "discharge at 5pm" can overload a local substation that was never designed for two-way power.
• Flexible connection agreements. The traditional firm-export connection is the wrong product for a battery that wants to participate in peak windows. Curtailable, dynamic and flexible connection types need to become routine, and priced.
• A working balancing market for small assets. Aggregators like Octopus's Kraken platform are how millions of small batteries get to bid into ancillary services. That stack needs to keep being opened up by NESO.

The boundary between layers, restated

1. SEG is the regulatory obligation. Floor only, ≤5 MW, domestic and small-commercial.
2. Supplier SEG products are the actual tariffs you sign up to. Octopus Outgoing, E.ON Next Export Exclusive and Good Energy Solar Savings sit here.
3. Commercial PPAs are bilateral contracts above 5 MW, or below it when negotiated bespoke. Different legal framework, longer terms, REGO handling explicit.
4. Symmetric time-of-use tariffs (Flux and its successors) are a new structural pattern that sits on top of layers 1–2. The same supplier, but pricing import and export on the same clock so the household optimises for the grid's actual need.

For anyone modelling solar export economics today, all four layers matter. SEG and PPAs set the baseline value of a kWh sold. Symmetric tariffs change the question from "what is my export rate?" to "what is my arbitrage spread, and how much storage do I need to capture it?" The second question is much more interesting, and increasingly, much more lucrative.