Should I install solar panels at home?

Having solar panels installed at home sounds like an appealing idea. You get free electricity when the sun shines, potentially cutting your energy bills and doing your bit for the environment without having to give it much additional thought.

Experts say that cutting the carbon emissions associated with powering and heating our homes, which emit a fifth of the UK’s CO2, is crucial if the country is to reach its target of being net zero by 2050.

And at a time when energy costs are soaring and more and more of us want to do our bit for the environment, fitting solar panels on your home has never seemed more attractive. But what are the pros and cons of installing solar panels — both environmentally and financially speaking?

Why install solar panels at home?

Consumers are becoming increasingly aware of the need to use ‘green’ or renewable energy. New research from Citizens Advice reveals that two-thirds of householders are thinking about making their homes more energy-efficient in the next 12 months, while in a study from NatWest 55% of homeowners said they have plans to make eco-friendly improvements to their property over the next decade.

Solar and wind are now the lowest cost ways to generate electricity and, unlike other more traditional types of energy, they won’t run out. It’s not surprising, then, that fitting solar panels on the roofs of domestic properties is a popular home improvement, with an estimated one million systems on houses across the UK. They are not cheap, but in the longer term they should help cut your electricity bills as well as your carbon footprint, while you also get paid for the extra energy you generate.

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How do solar panels work?

Solar electricity panels, also known as photovoltaics (PV), capture sunlight and convert it into electricity which can then be fed into your home’s main electricity supply. A solar PV panel consists of many cells made from layers of semi-conducting material, typically silicon. When light shines on it, a flow of electricity is created which means you can generate your own renewable electricity.

The electricity produced by your solar panels will be used to power any appliances that you’re using in your home at the time the energy is generated. Any surplus electricity which is not used will be sent to the grid, for which you will be paid.

If you’re researching solar panels, you may also come across thermal solar panels but these are only used to heat water.

How much do solar panels cost?

That depends on your choice of panels. This, in turn, will be determined by how much electricity your household uses, how much roof space you have, and how much money you’re willing to spend.

A single solar panel can cost between £350 and £500. One of the popular domestic sizes is a 4kWp system, which will cost around £6,000 and typically cover around 29 square metres of roof. The Energy Saving Trust (EST) says the average domestic solar PV system is 3.5kWp and costs around £4,800 (including VAT at 5 per cent). This will typically take up around 15-20m2 roof area, making it suitable for the average terraced house.

How much do solar panels cost to install?

Much of the cost associated with solar panels comes from installation, and the Energy Saving Trust (EST) recommends getting quotes from at least three installers.

Some of the installation costs can be shared if you already have scaffolding up for roof repairs or if you are building a new house. Costs are also affected by whether you choose panels or tiles, and whether you opt for building-integrated panels or choose panels that sit on top of your roof. Panels on top of the roof are the cheapest option, while tiles are the most expensive for the equivalent system.

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Will installing solar panels really save me money?

How long it will take for your solar panels to pay for themselves, and whether you can make money from them, will depend on the cost of your solar PV system, how much of the electricity generated you are able to use and whether (and how much) you are paid for any surplus electricity.

Generally, solar panels installed on the roofs of homes and buildings won’t give much financial payback for the first 20 years or so, according to Mike Childs, head of science at Friends of the Earth. “But there are huge environmental benefits, depending on where you live and how much electricity you use” he says. “The average person contributes 12.7 tonnes of carbon per year, but by installing solar panels around 1 tonne of carbon can be saved annually, so the potential is significant.”

Can I make money from the energy my solar panels generate?

If you have a solar PV system and generate more power than you need, the surplus will go back into the national energy grid. Under the Smart Export Guarantee (SEG), which was launched in January 2020, electricity suppliers offer payment for each unit of power you export to the grid. The previous feed-in tariff scheme was far more generous, but it closed for new customers at the end of March 2019.

If you’re selling electricity back to the national grid, you can select the best SEG tariff available, separate from any contract you have with an energy supplier that powers your home.

SEG tariffs can be fixed or variable. A fixed SEG tariff will pay a determined rate per kWh of electricity exported over the length of the contract. A variable SEG tariff will vary the price based on market demand, with the only requisite that prices never fall below zero.

Solar Energy UK has a helpful league table which reveals which suppliers currently offer the best rates. Alternatively, Ofgem publishes a list of SEG licensees every year and you can contact an energy company directly for more information on its tariffs.

The Energy Saving Trust estimates that a household in London could save around £295 a year on its energy bills by having solar panels installed if there is usually someone at home all day, and could save an additional £90 a year by selling surplus energy under the Smart Export Guarantee.

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How can I find the best deal on solar panels?

If you’re considering installing solar panels at home, it’s worth finding out if you could be eligible for funding or financial help. Elliot Clark, project officer in the home energy team at the Centre for Sustainable Energy, said: “Start with your local council as authorities may be awarded funding to install solar panels on suitable houses, although it is likely to be reserved for homes with a lower household income or those in receipt of mean tested or disability benefits.

The Microgeneration Certificate Scheme (MCS) provides a list of accredited installers. Clark adds: “We recommend going onto the government’s Trustmark website where you can search by area and solar panel installer. There’s also the Renewable Energy Consumer Code which installers can sign up to.”

How can you make the most of the energy you generate?

To make the most of the energy you get from your solar panels, think carefully about when you use your appliances.

Elliot Clark says: “Saving running appliances such as dishwashers and washing machines for the sunniest parts of the day will make your usage more efficient. You can also get a solar diverter if you have or are thinking of getting a hot water cylinder or thermal store, so any electricity generated that your property does not use can be diverted to heat water for you to use for washing or heating.”

“Hot water cylinders are likely to make a comeback as they are often used with heat pumps, and storing your excess electricity as hot water will reduce the demand of energy of your heat pump.”

Batteries could be another way for homeowners to store excess electricity produced by their solar panels to use at another time but there’s still some way to go before the technology makes this a viable option. Currently, these special batteries are bookcase size, and are so expensive and the cost would likely outweigh the benefits. They can also only store energy for a certain amount of time — typically for a few weeks, at the most.

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What are the disadvantages to solar panels?

The main barrier is the length of time you’ll need to wait to see a return on your investment, and the difficulty of calculating it in advance.

Installation can be expensive and solar panels’ performance can be adversely affected by weather – more of an issue in the UK than places such as the USA and Australia. Not all roof types are suitable, and panels can look ugly and take up a lot of space.

The production of solar panels is also not very eco-friendly; Friends of the Earth points out that 80% are made in China where manufacturing is largely powered by coal. They are also expensive and impractical to move, which may be an issue if you are likely to move house.

In a major report based on its own consumer complaints, Citizens Advice has expressed concern about mis-selling and cold-calling by rogue solar panel installers. It says many consumers have ended up signing up for contracts they don’t fully understand which leave them worse off than when they started out.

It is calling on the government to introduce protection through a net zero homes guarantee.

“We cut our energy bills by £1,000 a year”

Catherine Macneil, 61, and her husband Richard moved to a converted detached farmhouse dating back to 1800 in Mollinsburn, Scotland, in 2011. They were keen to avoid the “extortionate” energy bills of their previous home, which was also in a rural area.

After getting advice from Home Energy Scotland, Catherine decided to have solar panels installed along with a solar water heating system and a biomass wood-pellet boiler.

All three renewable technologies came in within her budget at around £25,000. She covered half of the cost with an interest-free Home Renewables Loan from the Energy Saving Trust. At the time the couple was also able to take advantage of feed-in tariff payments.

Since installing these technologies and by selling their surplus energy back to the national grid, the couple has enjoyed savings of around £1,000 every year on their energy bills.

“Our electricity bills are currently slightly less than £50 per month – so £600 per annum – and our our feed-in tariff last year was £1785 so that gives over £1000 towards our wood pellets” explains Catherine. “They cost roughly £2600 per annum. Without the feed-in money it would be difficult.”

Overall, she says, “I feel better for having the solar panels. They are not intrusive and we are all trying to be greener these days so this is our contribution.”