Do solar panels offer ray of light in energy crisis?
As costs soar, we look at the other options
ENERGY bills are rocketing so households are doing everything in their power to cut usage. Switching off lights, taking shorter showers, turning off the heating and leaving nothing on standby are just some of the tricks we’re all trying.
The pressure will really be on in October when the energy price cap could hit an incredible £3244, up from today’s £1971, Cornwall Insight predicts.
Another way to fight back is to generate your own energy by installing solar photovoltaic (solar PV) panels, which convert sunlight into electricity.
Almost a million Britons have installed solar panels at home. They could offer a ray of light in the energy crisis, but with an installation cost averaging £5420 for a three-bedroom home, do the savings really dazzle?
Install your very own solar system
Cash is tight right now and many people simply won’t have money to invest in solar panels.
It doesn’t help that the Government recently axed its Green Homes Grant, which offered a voucher of up to £5000 for two-thirds of the cost of energyefficient improvements.
That ended on March 31, although anybody who successfully applied before that date can still claim the support.
Earlier schemes have also come and gone – for example, the Feed-in-Tariff solar subsidy was scrapped in April 2019 and the Green Deal in 2015.
Your local authority may offer a home energy grant towards things like loft and cavity wall insulation, but not solar panels. Key in your postcode at simpleenergyadvice.org.uk/grants to see what’s available in your area.
At least you do not have to pay VAT when installing panels, due to a tax break announced earlier this year to encourage energy-efficiency, which will bring down the cost.
Make sure you do your sums on solar
Installing a solar panel system costs between £2900 and £6700, according to the Energy Saving Trust (EST), although the price can hit £9000 for more complex systems including battery storage.
That’s a lot cheaper than it used to be, down around 60 per cent over the last decade.
Solar panels will repay your investment over time, slashing energy bills by between £165 and £405 a year at current energy prices. Phil Foster, owner of Energy Helpline, said: “The time it takes to recoup your costs will depend on your consumption and what your bill was before you installed panels.”
Since April’s price cap jump, the break-even point for an average three-bedroom house has fallen to 10.2 years, according to website theecoexperts.co.uk. Solar panels should last for 25 years, which leaves 15 years of pure profit.
The more energy prices rise, the more you will save (while doing your bit to save the planet too).
Your decision may also partly depend on how long you expect to continue living in your current home.
But your investment could pay off even if you do move, said Paul Stringer, director at Norton Finance. “Solar panels can increase the value of a house by more than £1800, according to Solar Energy UK, although these things are hard to quantify,” he said.
If you don’t have cash to hand, banks offer home improvement loans that can go towards funding the work.
“This allows you to repay the cost over a longer period while already making solar-powered savings,” Paul added.
Some installers offer loans to help households spread the cost, but check the interest rate carefully as finance costs may wipe out any savings you make.
Consider getting battery power too
With a standard solar panel system, you consume energy as you generate it. The down of side is that most of the energy is generated during the day when the sun is out, but electricity use tends to peak in the evening when we are indoors making dinner or watching telly.
Pete Mugleston, money expert at onlinemoneyadvisoor.co.uk, said the benefits of going solar are lower for those who are out at work during the day, but higher for homeworkers.
You can get round this by investing in a battery storage system, which allows you to use the energy you generate whenever you need it. However, this adds between £2500 and £8000 to the cost, with the average bill £4500 for a three-bedroom house.
You may get some of this back by selling your surplus electricity to the grid during peak hours under from the
Installing solar panels can increase the value of a house by more than £1800
Smart Export Guarantee (SEG). This government-backed initiative makes electricity suppliers pay domestic solar panel users who send their excess low-carbon electricity back to the National Grid.
Yet according to Josh Jackman, senior writer at theecoexperts.co.uk, consumers are getting a poor deal.
Electricity currently costs 28.3p per kWh, which will rocket to around 40.3p per kWh in October, Ofgem said.
Yet producers currently pay on average just 3.9p per kWh, seven times below today’s price, Josh said.
ScottishPower is one of the more generous, but it still only pays 5.5p per kWh. This would hand someone with a three-bedroom home £82 a year for solar power worth £442 – that’s £340 less than they should be getting.
The discrepancy looks likely to get even worse from October as there is no guarantee that power suppliers will hike SEG rates.
Josh contacted all 15 Smart Export Guarantee suppliers, and only two, So Energy and EDF, said they plan to increase rates.
“Without any legal requirement, energy suppliers are technically free to pay solar panel owners as much or little as they want,” said Josh.
“And they take advantage of that fact.” Typically, the average solar user makes £112 a year when it should be a lot more.
Something is always better than nothing though, and if you do sign up, shop around to get the best tariff.
You do not have to use the same firm that supplies your energy.
What else do I need to know?
Solar panels are deemed ‘Permitted Development’, meaning that planning permission is no longer necessary, Phil at Energy Helpline said.
“The exceptions to this are if your house is a listed building or in a conservation area.
“Then it’s at the discretion of the local council.”
Solar panels do not need direct sunlight to work, which is handy for our grey and rainy island, but it’s a huge help if you can mount them on a south-facing, pitched roof that isn’t shaded by trees or other buildings during the peak daytime energygenerating hours.
You are still free to switch energy suppliers in the usual way, even if you have solar panels.
If interested, waiting lists for solar panel batteries are lengthy, so they may not be ready for this winter.
Even if you install solar panels, you still have your gas bill to pay.