AS millions of households struggle to cope with soaring energy bills, it’s no wonder more people are considering solar panels.
Spiralling wholesale gas prices and an increase in the energy price cap have added hundreds of pounds to household energy bills.
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Installing solar panels could potentially help you sidestep some of these rising costs, as well as being more environmentally-friendly.
Indeed, online marketplace ManoMano reported this month that sales of solar panels increased 99% as people looked for alternative ways to heat their home.
And the Energy Saving Trust says solar panels will typically cut your electricity bill by 15-25%.
But solar panels can cost thousands of pounds to install, which many people find off-putting.
There are also question marks over just how much energy you can generate in the less-than-perfect British climate, particularly at this time of year just as the clocks are about to go back.
Here we look at what you need to know about solar panels – and how much you can expect to save on your energy bills by having them.
How much do solar panels cost?
Prices will vary depending on your installer, but also based on how many solar panels you have.
Energyhelpline.com says 12 panels should provide enough electricity for a family of four and needs around 20 square metres of roof space.
Installation for this would cost roughly £6,000, it says.
But ongoing costs are low at least. A piece of tech in the panels called an inverter will need replacing around every 25 years and should set you back around £800.
Tashema Jackson, consumer champion at energyhelpline, said: “Solar panels can be a great way to save money on your energy bill while also reducing your home’s carbon footprint.
“You can also make some money by selling any surplus electricity you generate back to your energy supplier.
“Where you live in the country does have an impact on the savings you are likely to make, so it’s worth doing a bit of research before committing to an installation.”
How much energy do solar panels produce?
How much energy your solar panels produce depends on where you are in the country, which direction your roof faces – and, of course, the weather.
Solar panels, unsurprisingly, are reliant on sunshine to operate.
That means those living in the south of England may enjoy higher energy production than someone with solar panels in Scotland.
Energyhelpline estimates that a three-bedroom house in the South of England could expect to save around £400 a year if it had solar panels.
The same property in North Wales would save around £350, and in East Scotland just £300.
The Energy Saving Trust has a calculator that can help you work out how much you are likely to save.
It takes into account factors such as your postcode, direction of your roof, and how much of the day you are at home for.
We looked at home in the South East of England, with a west-facing garden, owned by someone who was mostly out until 4pm each day.
It estimated a potential energy bill saving of £104 with an additional SEG payment of £76 a year (more on which later).
Can I get free solar panels?
Unfortunately not. Homeowners used to be able to get a grant to pay for the installation of solar panels or an interest-free loan from the government, but these are no longer available.
The Feed-in Tariff (FIT) scheme was introduced by the government in April 2010 to increase take-up of renewable energy.
But the scheme closed in April 2019 and solar panel installations have since decreased.
Between April 2018 and March 2019, there were 32,370 installations in the 0-4kWh band (which is what the typical residential installation would be).
After the FIT scheme closed, installations dropped by 95%.
If you already get the FIT payments, you still get them even though the scheme has closed – it’s only ended for new applicants.
The payments are guaranteed to last at least 20 years from when you signed up – that’s why there was such a boom in installations just before the scheme closed.
Those signed up to FIT get one payment for every kWh of solar energy they generate, and another for any they sell back to the grid.
The rate ranges from 6.39p-13.88p per kWh and varies depending on the size of your installation.
Jackson said: “This scheme was ended as the government was concerned that it would mean too high a cost for wider energy bills due to the rising effect of renewable energy subsidies.”
However, costs have come down in recent years so solar panels are at least more affordable than they used to be.
It is possible to get a loan if you don’t want to fork out for solar panels all at once, but you should be sure to weigh up whether you can afford the repayments and how much the interest on the loan will add to the overall cost.
Jackson added: “There are a number of specialist solar panel financing firms, but it pays to be careful as historically some of these types of firms have received numerous complaints.”
Are there any other schemes I can use?
Yes, there are some schemes that can help you recoup some of the costs.
Firstly, if you are aged over 60 or receive disability benefits, you could get a 5% VAT reduction on the cost of buying or installing the panels.
To check if you’re eligible, contact your energy supplier.
A new scheme was also introduced in January 2020.
The smart export guarantee (SEG) pays you for any solar energy you “export”. This is electricity you generate but don’t use yourself.
This surplus energy can be sold back to the grid and could add up to hundreds of pounds over the course of the year.
The kWh rate you get will depend on your supplier.
SEG isn’t as generous as FIT, but MoneySavingExpert estimates you could save up to £360 a year through the new scheme.
That would mean you could cover the cost of the panels in about 15 years.
But as previously mentioned, that will depend on where you live and how much sunlight you get.
MSE says for homes further north it could take as long as 26 years to break even.
If you do not have an export tariff set up or a storage unit, any additional electricity you generate that you do not use immediately will be wasted
Research by Which? In 2020 found the price you could get per kWh varied from 1p to 5.5p.
That compares with a rate of around 17.2p/kWh if you’re buying energy on a standard tariff at the moment.
The disparity between the best and worst tariffs highlight the importance of shopping around.
Which? Found that for a property generating 3,000kWH of electricity a year and selling half of that back to the grid, the amount earned would range from £15 if you were on the worst tariff to £82.50 for the best.
That’s on top of the savings on your bill too.
How do SEG tariffs work?
All energy firms with more than 150,000 customers have to offer a SEG tariff, but smaller firms can choose to do so too.
A fixed rate SEG tariff pays a set amount per kWh of electricity you export to the grid.
A flexible rate tariff pays a different rate depending on how valuable the electricity is to the system at different times. So you could get more money if there is a high demand.
Multi-rate tariffs, meanwhile, offer set rates for different times – for example day and night rates, or weekend and weekday rates.
And if you don’t want to sell the electricity, you could buy an electricity storage unit and keep hold of it.
This can be a good strategy if you find you produce more than you need in the brighter summer months when there’s more heat and light, to cover you during the winter months when you’ll likely generate less.
What if I want to move house?
There are a couple of considerations before you install solar panels.
One is that some people really don’t like the look of them and are concerned it could make their home more difficult to sell. This is a matter of personal preference though and shouldn’t stop you installing panels.
Planning permission is something else to think about. You shouldn’t need it unless your home is listed or has a flat roof, but it’s worth doing your research rather than finding out later.
You should also check they’re covered by your home insurance.
If you are still paying off a loan or finance agreement on your panels and decide to move house, you’ll be liable for that cost. So factor that into any moving costs if you decide to move.
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