Solar panels are used by over eight hundred thousand UK houses to generate electricity and save money on their energy bills. For those that haven’t yet invested in solar power for their homes, there are several things to consider.
Solar Photovoltaic Panels
These types of solar panels generate electricity from sunlight (though they do work on cloudy days – daylight rather than actual sunshine is required).
The cost of solar photovoltaic (PV) panels and installation has fallen during the last ten years or so. The average cost is now around £6,000 compared to around £12,000 a decade ago. However the solar panel support scheme launched by the government in 2010 is now coming to an end. The scheme pays a feed-in tariff for all the electricity generated by a household whether or not they made use of it as well as paying an export tariff for power generated that isn’t used and is sold back to the grid.
Initially the payments were extremely generous which meant that set up costs could be made back within about twelve years. The payments have been getting lower and lower though and the government plans to get rid of them completely in March next year.
Currently, if panels are installed before the deadline the initial outlay could probably be made back within about twenty years, obviously depending on energy usage. You do need a south facing roof and a Grade D Energy Performance Certificate to make the most of the feed in payments.
After the deadline however, the only savings will be on the energy generated and used. It has been estimated that it may then take over seventy years to make make back the cost of installing them, and the panels themselves usually only last about twenty five years.
Falling solar panel prices and new technology such as Tesla’s Powerwall could make a difference though. If the panels are less expensive to install and the power can be stored within the household for later use then it may still offer a saving to some, particularly those who use significantly more electricity than an average household. In addition, generally houses that are further south will generate more power than those with shorter days (it is daylight rather than actual sunshine that generates electricity via the panels).
Solar Thermal Panels
Solar thermal panels are different from photovoltaic panels and allow you to heat water and cut down heating bills as a result. These solar hot water systems are a renewable energy source which captures the energy radiated by the sun within the panels (or tubes called collectors). The warm fluid is then moved down pipes through a coil in the hot water cylinder in a home thereby reducing the amount of electricity, gas or oil needed to heat the hot water required by a household.
They won’t provide all the hot water necessary but it has been claimed that these panels can provide around sixty percent of a household’s hot water requirements, making a decent dent in bills.
Solar thermal panels plus installation will usually cost somewhere between £3,000 and £6,000 depending on the size of the system required. They are estimated to save roughly £50 a year with a gas boiler, £55 with an oil boiler, £65 if coal is used, £80 with an electric boiler and £95 if LPG is used.
In addition to these savings, the government’s Renewable Heat Incentive pays you for the renewable energy you produce. If you successfully register for their Metering and Monitoring Service Package (MMSP) then you will get a single lump sum payment of £805 and MMSP payments of £115 per year (paid quarterly) for heat pumps, or a single lump sum payment of £700 and MMSP payments of £100 per year for biomass pellet boilers. These payments will be made until the end of your RHI lifetime or until the MMSP agreement ends or is terminated. This scheme changed on 22 May 2018 so those who registered before then will have different payments.
Are solar panels worth it?
You’ll need to look at the costs and savings in relation to your own household in order to decide whether there is a financial benefit for you in installing solar PV or solar thermal panels. You can find calculators online to help you to work this out, though be sure they are up to date regarding the government schemes discussed above.
Another consideration is that both types of solar panels are more environmentally friendly and reduce your carbon footprint. If this is important to you then that may also make it worthwhile to you regardless of financial savings.