The cost of living is rising and energy bills are on the rise, so households in the UK will be seeking ways to cut down their monthly expenses. You can save some money by making small changes to your home. However, many people want to make long-term savings on their electricity bills.
Shane Hickey of The Observer stated that homeowners are “looking up” to ease their budget pressures as UK energy prices rise. Solar panels are one way to get a ray of sunshine.
According to a 2020 government report, over 970,000 UK homes are equipped with solar panels. The numbers are growing rapidly according Amy Cutmore from Ideal Home. “You have probably noticed solar panels appearing on rooftops around the UK. It seems that this trend will only continue.”
Hickey asked, “Does the investment for installation pay off?”. The demand is rising as more people work from their homes. Here’s what experts have to say about solar panel investment and installation for 2022.
What are the benefits to solar panels?
Attila Tamas Vekony of GreenMatch said that solar panels are able to take advantage of the “one of nature’s most powerful and free resources”, the sun’s energy. These panels make use of semiconductor technology to convert sunlight into electricity, which can then be used to power your house. There are two main types: photovoltaic, which produces electricity, and solar thermal, which is used to heat.
These are the key benefits of solar panel:
All year electricity
Reduce your carbon footprint
You can increase the market value for your property
Make money off excess energy you generate
The Energy Saving Trust stated that solar panels are a great way to reduce electricity bills. Solar panels offer free sunlight, so after you have paid the initial installation fee, your electricity costs can be decreased.
How much does it cost for solar panels to be installed?
Solar panels have become more popular as people make conscious choices to be more sustainable, according Josh Jackman of The Eco Experts. The number of solar panels installed has increased by 45% over the last three-years. “Increasing numbers of households see the benefits of solar power, so they are taking advantage.” According to government data the cost of solar panels have fallen 88% since 2010. This happened “just in the right moment”.
Hickey from The Observer stated that solar panel installation still comes at a high cost. Average installation costs from solar panel companies London are nearly £5,000. Rising labour costs and shortages of solar panels are driving up prices. Installation of a 3.5-kilowatt-peak system (kWp), costs an average of £4,800. “This usually involves about 12 panels.” You will need 15-20m of panels for a 3.5kWp installation.
The Energy Saving Trust estimates that a domestic solar photovoltaic panel system with 4.2kWp would cost about £6,500. Tiles are more expensive than tiles, and panels are best for roofs. “Costs can vary among installers and products so we recommend getting quotes at least from three installers.”
Rishi Sunak announced in the Spring Statement that households will no longer pay VAT on energy-saving equipment like heat pumps or solar panels. This could help to reduce the cost for solar panel installation by upto £1,000, said Rishi Sunak.
How much money could solar panels save you?
Andrew Capstick from MoneySavingExpert said that the “maths of solar panels” are improving, but that they’re no longer as lucrative. While the price to have solar panels installed has fallen over time, with rising energy costs, “generating solar power yourself and saving money is much more appealing now than ever.”
Capstick stated that “using what you produce” is the best way to save money on your bills. This could result in savings of up to PS440 per annum. Energy Saving Trust estimates are based on a typical household that has a 3.5kWp system. This can reduce your bills by between PS170 to PS440 per year.
Tamas Veksy of GreenMatch.co.uk stated that in addition to incentives like the Smart Export Guarantee, (SEG), you can also earn money by exporting surplus energy back to the grid.
The SEG was launched in January 2020. It is a government-backed project. The SEG requires certain electricity suppliers (SEG licencees) to pay small scale generators (SEG Generators) low-carbon electricity. These generators then export to the National Grid provided they meet certain criteria.
The verdict: Are solar panel worth it?
There are many eco-friendly options to lower running costs and add value for your home, but solar panels are one of the “outliers”, according to James Forrester from Barrows and Forrester estate and lettings agents. While solar panels are one of the most popular ways to improve the carbon footprint of your home, it appears they offer very little in the way of value.
“Installation costs around PS5,875, and the value added is about PS1,916, a loss o -PS3,959. But, there are obvious savings that can be made from lower utility bills. If the owner intends to stay in their home for many more years, then solar panels may still offer great savings,” said the agent.
Jackman from The Eco Experts stated that solar panels “are worthwhile”. The profitability of your solar panels “depends on where in the UK you are, as the sun shines differently in different regions.” It makes sense that each region has a different break-even point. It takes East Anglians 10.21 years to reach breakeven while northern Scotland takes 14.84.
Even though it may require a large upfront investment, Tamas Veny of GreenMatch stated that investing in solar energy can provide a great return on your investment over the long term.