Wondering if solar panels are worth it for your home?
I know that making the switch to solar can be a big decision – but the benefits can be huge and really cost-effective.
Not only will you see a reduction in your energy bills, but you could also earn money from the government for generating renewable energy.
Installing domestic solar panels can save you a lot of money in the long run, but the initial investment can be pretty hefty.
So is it really worth it?
Solar panels are definitely worth it. Not only do they help reduce your carbon footprint, but it also increases your home value and saves you money on your energy bills.
Not only can solar panels help save you money, but they also don’t require much maintenance. In addition, installing solar panels can improve your home’s Energy Performance Certificate (EPC) rating by up to two grades.
In this article, we’re going to explore some of the reasons why solar panels are worth it in 2022 and beyond. In the end, I think you’ll agree that solar is a great investment for your home.
1. The numbers are improving for solar panels
As you’re well aware by now, the price of our energy has gone to the moon in the last few years. And it doesn’t seem to be slowing down anytime soon.
In fact, producing your own energy is now on everyone’s radar (especially if you’re on a tight budget).
Domestic solar panels used to be something only the wealthy could afford. But now, with the advances in technology, they are more affordable than ever before.
The Smart Export Guarantee (SEG) Scheme which is a government solar panel program that went into effect in January 2020 in the UK is one of the main reasons solar panels are worth it. The SEG is a government initiative that pays UK residents for generating renewable energy.
You have the choice of using the energy yourself via your solar panels, inverter, and battery storage unit or pumping it back into the national energy grid. And for every kilowatt-hour (kWh) you export, you’ll receive a certain amount of money.
Right now, you could get between 2-5.6p per kWh. At 5.5 p/kWh generated from 3,000 kWh used annually (which is the average household consumption), you could earn £165 a year. So the economics of solar panels are improving.
Before the SEG we had the Feed-in Tariff (FIT) Scheme which paid out a lot more. The rates were much higher because the government was trying to incentivize people to install solar panels. But for some reason, the government decided to expire the scheme in March 2019.
The SEG is a great replacement for the feed-in tariff, but it’s not as generous. So, you’ll have to decide if the lower payments are worth it.
Saying that, with the interest rates so low at the moment, the returns on your solar investment are pretty good when you calculate it over the lifetime of the solar panels.
2. You’ll see the biggest benefits from using what you produce.
There has been a ton of focus on getting paid for the electricity you generate, but, in some cases, using the energy yourself is the best option.
If you have a battery storage unit, you can use the energy your solar panels generate during the day to power your home at night. And if you have an electric vehicle (EV), you can charge it during the day and get cheaper rates than you would from your utility company.
According to the Energy Saving Trust, they estimate that a typical British household with a 4.2 kilowatt-peak system could save around £297 and £729/year off bills by using their solar panels to generate electricity and heat their residential home. This is taking the October price cap into consideration.
3. If you produce more energy than you use, some companies will pay you for the extra – but SEG tariffs vastly vary.
The Smart Export Guarantee (SEG) scheme asks energy suppliers who have over 150,000+ of customers in England, Scotland, and Wales to offer a tariff for any renewable electricity you produce and export to the grid and don’t use yourself.
In turn. those suppliers will pay a set rate for each kilowatt hour (kWh) of electricity you generate.
The return varies from just 1.5p per kWh to 12p per kWh, so choosing the right supplier is essential if you want to make the most out of your investment.
To find the best SEG deal, it’s important to compare smart export tariff (SET) offers from different suppliers. You can do this by using a price comparison website like Energy Helpline or MSE Cheap Energy Club.
According to the Energy Saving Trust, a family living in the middle of England could potentially save £80-£110/year on energy costs (calculated at 3.99p per kWh).
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What You Need To Know About The Smart Export Guarantee
Payments will stop if your solar export tariff provider goes bust
Over the last few years, several energy suppliers have either gone bust or left the market. This includes big energy suppliers like Omni Energy Limited, MA Energy Limited, Zebra Power Limited, and Ampoweruk Ltd.
The problem is, that when an energy supplier leaves the market, any smart export tariff (SET) payments you’re owed will stop. So, if you have a balance of £200 in your account and the company goes bust, you’ll lose that money.
To protect yourself from this happening, make sure you choose a reputable energy supplier that’s financially stable since your export tariff won’t be automatically switched to another provider if they go out of business by the energy regulator Ofgem. You are responsible for finding a new provider.
Ofgem has a list of accredited export tariff suppliers on its website.
To make matters worse, you wouldn’t receive SEG payments for the electricity you export during the period your old supplier owes you money.
So, if Omni Energy went bust and you didn’t receive any payments for six months, you also wouldn’t be paid for the electricity you exported during that time.
So be careful!
To get the smart export guarantee payments, you’ll need a smart meter.
In order for you to get an SEG tariff and be paid for the electricity you export, you’ll need to have a smart meter installed.
If you don’t have one, your energy supplier will need to install one for you. This usually takes around six weeks.
This will include what they call a ‘SMETS 2’ meter which is the latest type of smart meter. If you have an older ‘SMETS 1’ meter, you may not be able to get an SEG deal with any provider.
If you’re not sure whether you have the right meter, you can get in touch with your existing supplier and they’ll be able to tell you.
Alternatively, you can contact a new supplier and they can arrange an appointment to come and install a new meter for you.
SMETS 2 meters have the ability to track solar energy exports, so your energy supplier will be able to see how much electricity you’re generating and exporting.
You need certified solar panels that produce five megawatts or less to qualify.
To be eligible for payments from energy suppliers through the smart export guarantee, you will need:
- Solar panels with a capacity of five megawatts or less.
- Solar panels that have received certification from the Microgeneration Certification Scheme.
- A meter that can measure how much solar electricity you produce and send it to your supplier every half hour.
Please note that if you have solar thermal panels, you won’t be eligible for the smart export guarantee. Even though it is renewable and can heat your water and cut your bill, it is not covered, unfortunately.
You must submit your application directly to the smart export guarantee provider.
To apply for a tariff, go to the supplier’s website and fill out an application form or download one and send it back via email or post it back. To get your Microgeneration Certification Scheme certificate, you’ll need to bring your current meter reading, as well as your MCS certificate.
4. It Takes on Average 11 Years To Break Even
The fact that a typical 4.2 kilowatt-peak solar panel system costs around £6,500, means (according to the Energy Saving Trust’s figures) that it takes approximately 8 to 17 years to break even.
This is the amount of time it would take for the solar PV system to generate enough electricity to cover its own costs.
One of the ways to calculate this is to use the Discounted Cash Flow (DCF) method. This is where you take into account the time value of money, which basically means that a pound today is worth more than a pound in the future.
The other way to calculate the payback period is through the Levelized Cost of Energy (LCOE). With this method, you divide the total cost of the system by the amount of electricity it produces over its lifetime.
This gives you a cost per unit of electricity, which makes it easier to compare with the price you pay for your electricity from the grid.
The LCOE method is generally used by the government and industry, as it’s a more accurate way of assessing the true cost of solar PV.
Of course, this varies depending on how much you paid for your installation, whether or not you received a government grant towards its cost, and how much you’re paid per kilowatt-hour (kWh) for the electricity you export.
Bear in mind that your roof is south facing and at a 30 to 45-degree angle will mean your system produces more electricity and, therefore, returns on investment are quicker than if it was west, north or south facing.
Energy Saving Trust’s solar panel calculator
Use the Energy Saving Trust’s solar panel calculator to get a good estimate of how long it’ll take before your installation starts saving you money.
[SOLAR PANEL CALCULATOR]
Note: Don’t forget that this is just an estimate. The amount of time it’ll take for you to start seeing savings will also depend on how much sunlight your panels are able to capture and convert into electricity, as well as how much electricity you use.
Your payments can vary based on your location.
There are several factors that will determine how quickly you can start seeing a return on your investment, but one of the most important is your location.
This is because the amount of sunlight that hits different parts of the UK varies throughout the year. For example, Cornwall and Devon tend to be sunny all year round, while Scotland gets more sunlight in the summer months.
The amount of power you can generate is directly impacted by how much sunlight your location receives. For example, households in North Scotland get an average of 1,080 hours of sunlight every year while those in East Anglia get up to 1570 hours per year, according to the Met Office.
So, if you live in an area that gets lots of sunlight, you’re more likely to start seeing a return on your investment sooner.
Also, if you work from home a lot or have someone who is constantly at home then you will make your money back quicker as you will be using more solar electricity than if you were only at home in the evening.
The average time is approximately 8 years on average, whereas if most of the electricity is consumed in the evening then the payback period works out to approximately 17 years.
However, if you’re consuming more in the evening, then the smart export guarantee (SEG) would be more beneficial for you.
5. Use Most Of Your Electricity While You’re Generating It
To max out your savings it works out better if you use most of the electricity while you’re generating it.
This is because when you’re exporting electricity back to the grid, you’ll only receive a payment for every kilowatt-hour (kWh) that your panels generate.
So, if your panels are generating more electricity than you need and you’re exporting it all back to the grid, you’re essentially giving away free electricity.
Of course, this isn’t always possible and there will be times when you need to use more electricity than your panels are generating. But, if you can, try to use as much solar electricity as you can during the daytime.
At the moment, you pay roughly 28p per kilowatt hour for electricity when you buy it from your supplier which would be on price capped tariff.
So, the more you use instead of exporting, the more you save.
6. Some Homes Are Not Good Candidates For Solar Panels
Not all homes are created equally when it comes to solar panel installations.
For example, if your home doesn’t get much sunlight or if it has a lot of shading from trees then you probably won’t see as much of a return on your investment.
Typically the hours between 10 am and 4 pm is the best for solar power generation, so if your home doesn’t get much sun during those hours then you probably won’t generate as much electricity.
Similarly, if your roof is in poor condition or if it’s north-facing then you might not be able to install solar panels at all.
Traditionally south-facing roofs have been seen as the best for solar panel installations, but east- and west-facing roofs can also work well.
If you’re not sure whether or not your home is a good candidate for solar panels, we recommend that you speak to a professional installer.
They’ll be able to assess your property and give you a better idea of whether or not solar panels are right for you.
The overall size of your roof also has a bearing. If you have a large roof, then you can install more panels and generate more electricity. This will obviously increase the amount of money you save on your energy bills.
Each solar panel takes up around two square metres of roof space and the average home has around 12 square metres of roof space. So, if you have a small roof then you might only be able to install a few panels.
If you have a diagonal roof then you’ll find that it catches even more rays from the sun and is, therefore, an even better candidate for domestic solar panels than a flat roof.
To install solar panels on a flat roof you’ll need to have them installed at an angle, which can increase the cost of installation. This is down to the fact that they will need different brackets and supports.
The good news, you probably won’t need planning permission in England and Wales to install solar panels.
According to the Government’s Planning Portal, installing solar panels is usually considered ‘permitted development,’ meaning you likely won’t need planning permission.
The main exceptions to this are if you live in a listed building, have a flat roof, or if you live in a conservation area.
If you’re not sure whether you need planning permission, we recommend that you check with your local authority before proceeding with the installation.
7.It Won’t Stack Up If You Move Before the 10th Year
Since it takes around 11 years to fully recoup the cost of solar panel installation, it’s important to think about whether or not you’re likely to move home in that time. If you move, then it’s unlikely that you’ll make your money back.
Even though you could physically remove the solar panels and take them with you, it’s not really worth doing as it’s quite a difficult and expensive process.
It’s much easier (and cheaper) to leave the solar panels for the new owners and hope that they’ll get as much use out of them as you did.
You also wouldn’t be able to receive payments via the SEG since the solar panel installation needs to be certified by the Microgeneration Certification Scheme. If the panels have been moved they would no longer certify the installation and you would lose your payments.
So, if you’re thinking of moving in the next few years then solar panels might not be the best option for you.
You’d be better off spending your money on energy-efficient improvements that will help to reduce your energy bills, such as insulation or double glazing. These improvements will also add value to your home, which is an added bonus.
8. Don’t Assume You Can Recoup The Cost Of Your Solar Panels If You Sell Your Home Early
Installing solar panels on your roof does not guarantee that you’ll make your money back if you sell your home early.
Even though solar panels can save you a lot of money in the long run, there are some people that just don’t like the look of them.
This means that there’s always the possibility that you’ll find it harder to sell your home if you have solar panels installed.
Obviously, this isn’t always the case and it really depends on the buyer but it’s something that you should be aware of before going ahead with the installation.
If you have any thoughts of moving within the next few years then we recommend that you wait until you’re settled in your home before installing solar panels. This way, you’ll be more likely to recoup the cost of installation when you do eventually sell up.
According to Solar Energy UK’s most recent report, homeowners who have had solar panels installed and then sell their property would make back some of the value of the investment through a higher sale price.
The study looked at more than five million transactions and showed that, on average, a home with solar panels could be sold for £1,800 more than one without them.
For those forward-thinking and at home with sustainable projects, you would assume that everyone would see the value in having solar panels. However, this isn’t always the case. In the UK, solar panels are still relatively new and there are some people that just don’t like the look of them.
9. Changing your Energy Supplier Won’t Be a Problem
Just because you signed up with one supplier, it doesn’t mean that you’re stuck with them forever. You can switch energy suppliers as often as you like and it’s really easy to do.
If you’re thinking of switching to a green energy tariff then we recommend that you use a comparison site like Uswitch or Money Supermarket. This way, you can compare all of the different tariffs and find the one that’s right for you.
Even if you get your electricity from a supplier, it doesn’t mean it has to be the same one that pays you for the electricity your solar panels generate. The government’s SEG scheme is open to all energy suppliers, so you can choose who you want to receive payments from.
It’s worth noting that some suppliers will offer a higher rate for the electricity generated by your solar panels than others. So, it’s definitely worth shopping around and doing your research before making a decision.
With a SMETS 2 smart meter, two energy suppliers can use the same meter without any problems. This means that you can switch energy suppliers without having to install a new meter.
10. Get 3 Quotes From Registered Installers
As you’ll see with any article published on Outdoor Rumors, we always recommend that you get at least 3 quotes from registered installers before having any work done on your home. This is because it gives you a better idea of the market rate and ensures that you’re getting a fair price.
Now, don’t just get a figure over the phone. Make sure you get the quote in writing, detailing the work that’s going to be carried out and the price you’ve been quoted.
Once you have your 3 quotes, you can then make an informed decision about which company to go with.
Check if the quote includes:
- Price of the solar panels.
- Price of the inverter.
- Price of the installation itself.
- Any roofing works needed.
- Internal wiring needed.
- Whether parts of the roof need to be removed.
- Whether they will arrange the connection agreement with your supplier.
- Extras needed to fit the generation meter.
Expect the job to take approximately two days from start to finish. Once the scaffolding has been erected, the solar panels will be fitted to your roof and then the inverter will be installed. All of the wiring will be done internally, so you shouldn’t need to worry about that.
Once they have been fitted, confirm once again that the panels are registered and they will provide an MCS certificate. It’s an important part of the process since you won’t be able to register for smart export guarantee payments without it.
Never take out a loan from a solar company to pay for the panels
Where possible, we recommend that you pay for the solar panels outright or source the funds from your bank. Oftentimes, the supplier will go through a 3rd party lender which means that you’ll not only pay high interest rates, but also the commission that the solar company gets from the lender.
Speak to your bank directly and see if they can provide you with a loan. The interest rates will be much lower than if you go through a 3rd party lender. You may even be able to add it to your mortgage, however, this is also something we wouldn’t recommend since you’ll end up paying more interest in the long run.
Solar panels require very little maintenance
According to The Energy Saving Trust, solar panels require very little maintenance. The only change during the lifetime of ownership might be the inverter which is a key component and needs to be replaced every 10-15 years on average costing approx £800.
If this happens to go wrong, check the warranty agreement first as some solar companies will offer a free replacement.
Aside from that, you should give the panels a visual inspection every now and again to check for any damage. Snow and leaves can cause problems, so it’s worth clearing them away when necessary.
If your panels have been damaged during a storm, before paying to replace any that are damaged, check to see whether they may be covered by your building’s insurance.
For added safety pay with your credit card
Whenever you spend over £100 on your credit card, Section 75 of the Consumer Credit Act 1974 protects you. This means that if something goes wrong with the purchase, you can claim the money back from your credit card company.
This is helpful to know as it gives you an extra layer of protection on top of any warranty that might be in place.
In essence, you will have the same rights with your card company as you would with the installer. So, if they go bust, you can still claim your money back if they failed to deliver on what they were contracted to.
There’s zero protection if you pay for your panels on a debit card, so we recommend always using a credit card.
Paying by cash or bank transfer offers no protection whatsoever, so avoid doing this at all costs.
11. Although solar batteries are expensive, they may be worth the investment for those who consume a lot of electricity.
The benefit of having a solar battery unit is that it can store the energy your solar panels generate during the day, so you can use it at night or during a power cut.
Solar batteries are still a relatively new technology and as such, they are quite expensive. A good quality solar battery unit will set you back around £2,000.
That said, if you consume a lot of electricity or live in an area with regular power cuts, then a solar battery could be well worth the investment.
The price per unit of energy you export to the grid works out much less than the price you would pay your supplier for the same amount of energy.
The average return on investment for a solar battery is around 5-10 years which will likely increase since the price of energy is increasing almost daily.
A storage battery installed in a home could allow the household to use 30% more of the electricity they generate themselves, as stated by E.on.
Smart units like Tesla’s Powerwall actually calculate the best time to use the stored energy, and will automatically discharge during blackouts.
It also works out the best time to release energy back to the grid when demand is high. This means you have the possibility to earn even more money.
If you use a lot of electric appliances and tech, and especially if you drive an electric car, then it makes even more sense to have a solar battery.
It’s going to be so much cheaper to use the electricity you generate yourself than it is to buy it from your supplier.
You will also break even sooner if you have a higher-than-average electricity usage. If you live in an area with high demand charges, or your electricity provider charges more for using electricity at certain times of day, a solar battery can help you to avoid these charges.
In the UK, several utility companies still have Economy 7 rates, which charge a higher rate for electricity used during the day.
If you want to save money on your electricity bill, the best time to use power is during off-peak hours.
Off-peak times are typically between 10 pm and 8 am when fewer people are using electricity. If you’re on an Economy 7 tariff, this is especially beneficial as you’ll be charged a lower rate for using power at night. Hence, why charging your car overnight is cheaper than during the day.
12. Nothing Changes If You Already Have The Feed-in Tariff
The good news is, if you’ve already got solar panels, you’ll continue to receive the same payments for the electricity you generate and export to the grid as you did before.
The UK government’s Feed-in Tariff (FIT) scheme was a way of rewarding people who generate their own renewable energy, such as solar power.
Depending on when your panels were installed, you’re guaranteed to get payments for at least 20 years:
- 25 years if installed and certified before 31 August 2012
- 20 years if installed and certified between 1 September 2012 and 31 March 2019
Is there a free solar panel scheme in the UK?
The answer is no, there are no free solar panel schemes available in the UK. While there may be some companies that offer to install solar panels for free, they will likely require you to sign a contract that locks you into using their services for a certain period of time, or they will lease the panels from you and charge you for the electricity they generate.
Are there government grants for solar panels?
The UK government has set up the ECO4 (Energy Company Obligation Scheme) with an allocation of £4 billion to help people with the cost of installing energy-efficient measures in their homes. However, this scheme is only available to those on certain benefits or with a low income. There are no government
What is solar sheeting?
Solar sheeting is a type of film that can be applied to glass or plastic. It’s designed to absorb sunlight and convert it into heat, which can then be used to generate electricity or heat water. Solar sheeting is usually transparent, so it doesn’t affect the appearance of your windows.
Are vertical solar panels any good?
Vertical solar panels are just as effective as traditional solar panels, but they take up less space. This makes them ideal for smaller properties or if you want to generate electricity without affecting the appearance of your home.
Is a 4kW solar system worth it?
A solar panel system with a capacity of 4kW is worth it since it can meet the energy demands of a household of three or four people. This type of setup will not only save you money on power bills, but it will also make your home more ecologically friendly while making your life simpler due to the product’s minimal maintenance needs and long lifespan.
What can I run on a 10kW solar system?
A 10kW solar power system generates around 40kW of energy each day on average and can keep the appliances of a huge 5+ bedroom home running, including all lights, televisions, laptops, refrigerators, washers, dryers, central air conditioning, and pool pump.