How much money can you save with solar panels?
Want to cut your fuel bills, make money and help the environment? Then installing solar panels is your best bet – find out how much solar PV and solar thermal heating can save you.
Solar PV and solar thermal
heating can save you money
Solar panels are fast becoming the most popular renewable energy technology in the UK; according to the Solar Trade Association (STA), there are over 100,000 solar thermal systems in the UK already.
How do solar panels work?
There are two types of solar panel systems:
Solar thermal heating – this system uses the sun's energy to produce hot water. Flat plate collectors, the cheapest and most common option, work by transferring heat from a flat sheet of metal to pipes which run underneath that to an exchanger. In extremely cold weather evacuated tubes work better as they are made up of a series of insulated glass heat tubes and are 10-15% more efficient. “The evacuated tubes are similar to a thermos flask,” explains Jonathan Mione, from Intelligent Energy Solutions in Leicestershire. Hot water is stored in a cylinder or linked to the domestic boiler or immersion heater for household use.
Solar photovoltaic (PV) – in these systems, cells (made up of layers of a material like silicone) are attached to the exterior walls or roof. When light shines on the cells they convert this energy into electricity for household use. Any excess electricity generated can be exported to the national grid or stored in a battery if the system is a standalone one.
Solar panels are available in tiles or as a fixed attachment to the roof which is cheaper but less attractive. Each system has panels which come in different sizes and strengths; solar energy is measured by the amount of electricity or heat in kilowatts that the panels generate per hour (kWh).
Is your home suitable for solar panels?
Make money from solar panels
with government incentives
According to the Energy Saving Trust (EST) anyone can have solar panels, but they will work best if on a south facing roof with a 35 degree slope which is unobstructed by any buildings or trees.You should insulate and make your home as energy efficient as possible before you consider installing any kind of renewable energy.
According to the STA, solar thermal heating can provide a family of four with 50-65% of their hot water needs per year. The system works best though for those who use a lot of hot
water, as Jonathan emphasises: “Solar thermal is most popular with people who use a lot of
hot water, families for instance rather than couples.”
How much money can you save?
Solar PV – according to the EST, you could save around £200 off of your electricity bill per year by installing solar PV.
Solar thermal – depending on what kind of heating you are replacing, you can save around £50-£85 per year in bills, says the EST
Make money with solar panels
Feed-in Tariffs – the government have introduced a feed-in Tariff (FIT) system to provide cash back for renewable electricity generated at home. Under the scheme,
a 2.9 kWh PV panel can make up to £1,190 a year when combined with savings on your electricity bill for 25 years, says the EST. Tim Bartlett, managing director of Eco Hometec Ltd in Doncaster
says: “Solar PV has become a lot more popular since the feed-in tariffs were introduced, you can make around an 8% return on investment with them.”Get in quickly though; the government have
proposed reducing the FIT rate from 43.3p per Kilowatt hour to 21p
per kWh for installations up to four Kilowatts in size - find out more about Changes
to the solar FIT scheme. At the reduced
rate, your panels can earn around £640 per year, says the EST.
The payments are tax free and linked to inflation - they work across two tariffs:
- Generation tariff – depending on the size of panels, you are paid per kWh of metered energy that your panels generate. This amount is payable whether you use the electricity or export it.
- Export tariff – whatever size the panels are, you can choose to receive either 3p per kWh of electricity or sell it on the open market.
From April 1st 2012 you will need to produce an Energy Performance Certificate with a rating of D or above to be eligible for the FIT scheme.
Renewable Heat Incentive (RHI) – a similar scheme to the Feed-in Tariffs has been launched for renewable heat technologies - including solar thermal heating. The RHI has been allocated £860 million in government funding and will be open first to industrial, buisness and public sector buildings, which contribute 38% of the UK's carbon emissions. Payments will be made for every kWh of renewable heat generated for 20 years and will provide a 12% return on investment, says the government. In 2013 household solar thermal installations should will also become eligible for the RHI. In addition to this the government will be offering grants of £300 towards the cost of installing solar thermal panels from July 2011. Find out more about the RHI here.
At a glance – how much can solar panels save you?
| Average cost | Annual CO² savings | Annual income and savings from panels | |
|---|---|---|---|
| Solar PV | £6,250 |
1,200kg |
Between £640 and £1,190 each year under the FIT scheme |
Solar thermal |
£4,800 |
250-580kg |
Up to £400 cash back each year under the RHI and a £300 grant, plus between £50 - £85 in savings on your bills |
*All figures are approximate and come from the EST
Other benefits of solar panels
Solar reduces your carbon emissions – the EST says that you can save as much as 1,200kg of CO² a year by switching to solar PV and 250kg per year if replacing gas heating with solar thermal heating. You can save 580kg of CO² when replacing electric heating with solar thermal heating.
Solar panels are low maintenance – apart from cleaning, solar panels require very little maintenance, so there are no added service costs each year. Panels are also incredibly easy to install.
Panels are long lasting – the EST reports that solar panels typically last at least 25 years.
Solar panels will cut your
carbon footprint
Planning permission for solar panels
If you live in a listed or historical building or in a conservation area, you will need to apply for planning permission to install solar panels. If you live in Northern Ireland or Scotland, you must consult your local planning authority about installing solar panels. Otherwise in England you should be allowed to install panels so long as they are no taller than the highest part of the roof, do not protrude more than 200m or take up more than a nine meter squared space.
Cost of solar panels
According to the EST, PV panels cost around £5,000 – £7,000 whereas solar thermal panels are cheaper, costing around £4,000. Grants may also be available from your local council.
