The UK’s cost of living crisis has many looking for cost-saving practices. And one solution that’s been the talk of the town for the last few years is solar energy. And for good reason, too.
Solar panels are undoubtedly a fantastic investment. Despite the high initial cost of installation, they will save you a lot of money in the long run. Solar systems are incredibly easy to maintain and will reduce your carbon footprint.
While these are great benefits and should be enough to convince you to install solar panels in your home, it’s important to research and consider your options very closely. Not all solar panels and systems are created equal, and you need to determine the best setup to meet your household’s energy needs and significantly impact your utility bills.
Keep reading to learn how to calculate how much you can save with solar panels in the UK.
Solar Panels and the Cost of Installation
The first step in determining your potential savings from solar panels is calculating the cost of installing a solar panel system.
The total price includes the cost of the solar panels and labour for their installation. However, the amounts will vary widely for each household based on the type of panels, how many will be installed, your home’s geographic location, the slant on your roof, and other factors.
On average, installing a 4kW solar panel system for an average-sized home in the UK currently costs around £6,000 to £8,000.
The Number of Solar Panels You Need
The number of solar panels you need depends on your house size, energy requirements, number of people, number of appliances, and even how you expect your family to grow in the future. Moreover, it will be affected by your location, the amount of sunlight you get each day, roof space, and other such factors.
Needless to say, solar power calculation is a complex one that’s best left to highly experienced and trained installation providers. Your solar provider can give you a quote and recommend the ideal number of panels for your household.
To verify these calculations and ensure that you will be presented with the best setup for your home, you can talk to as many solar providers as you want.
Solar Panel Grants
The total cost of solar panels may decrease if you’re eligible for the government’s Energy Company Obligation (ECO) scheme. The ECO scheme was launched in 2022 to help low-income households with home and heating system upgrades.
You can check your eligibility here.
If you can reduce the cost of solar power installation, the gap between your initial investment and long-term energy savings will increase substantially, thus increasing your savings over time. Another option to save on installation expenses is to get a loan through the Green Deal. While you will need to repay this loan, the repayment amount won’t be more than what you might make through savings on your energy bills. The interest rate will depend on the amount of your finance plan, and it will be fixed for the full term of the plan.
What’s more, the repayment process is simple—you will be charged in regular increments through your electricity bill.
The best part is, you no longer have to repay the loan if you move. The Green Deal and the improvements will stay with the property and will be inherited by the new owners.
Savings From Solar Energy
A 4kW solar panel system will generate up to 3,600kWh of energy per year. This much power can save your household around £270 to £1,000 on your bills. The range is quite large because it depends on how optimally you use the energy generated by your solar panels.
Here’s how it works:
Residential solar panel systems generate around 350 to 400 watts per hour at peak sunlight. On average, a household in the UK requires between 8 to 10 kW of power per day.
While your electricity needs will likely fluctuate depending on the time, your solar panels will only generate and supply energy to your household during the day. This means all the power you use at night or on cloudy days will still be pulled from the grid.
To fully power your home with solar power, you need a solar battery to store all of the excess energy from your solar panels. You can then use this energy anytime, fully eliminating your household’s dependence on local utilities.
However, you must ensure that your solar system and battery can provide all of your needs no matter the time of day, weather conditions, season, or other such elements. This is why the initial calculations are critical, especially if your goal is to go off-grid.
Savings From Exported Energy
Another way to earn savings from solar panels is by exporting excess energy back into the grid.
Schemes like the Smart Export Guarantee (SEG) pay households in return for the energy they send to the grid. The amount depends on how much energy you send back and your energy supplier—it can range from 1p to 15p per kWh. One good thing about the SEG is that you can switch your supplier to one that will pay you a better price for your extra energy.
The Feed-in Tariff (FIT) pays a much better rate than the SEG, so it’s the better deal. However, it is only accessible to those who installed their solar panels before 31 March 2019.
Note that the amount you get paid for sending energy back to the grid is much lower than what you will pay to use it.
Solar Panels: Lifespan and the Time It Takes to Break Even
When calculating your savings from solar panels, you must also consider two critical factors: the lifespan of your solar panels and the time it will take to break even on your investment.
For starters, it can take 11 to 14 years to earn back what you spent on solar panel installation. Solar systems with fewer panels will take longer because they generate significantly smaller amounts of energy.
Fortunately, most solar panels come with a limited power warranty that spans 25 to 30 years. This means you can expect a guaranteed power output of 90% for the first decade of use and 80% for the subsequent years. And even after the limited warranty period, solar panels will continue to generate energy that you can use, although at a lower rate. You will continue to get a return on your investment and gain financial benefits for the remainder of the solar system’s life.
To Summarise
Earning savings from solar panels is a given; you simply need to keep the panels in good shape for their lifetime. The most basic system could save you up to £1,000 each year on your energy bills. So long as your panels generate enough energy to power your house, you’ll break even in no time.
Furthermore, the cost of solar panels and their installation will continue to decrease while the energy costs you pay to pull power from the grid will continue to rise. This means solar panels are undoubtedly a worthwhile investment for most households in the UK.
To calculate your exact savings and determine the best system for your household, consider everything outlined in this guide and consult with various solar system installers.
We hope this article has helped simplify the subject and made your solar panel purchase decisions simpler!
