In 2022 we experienced significant increases to the cost of our energy bills. Whilst the government’s Energy Price Cap and Energy Bills Support Scheme have provided welcome relief to families across the country, many of us have considered if there are actions we can take to reduce our energy consumption and costs.

There are some smaller actions we can all be conscious of, such as not over filling the kettle, avoiding overuse of the tumble dryer or draught-proofing gaps in the home. However, could a larger-scale project, such as the installation of a solar panel system, be a worthwhile investment?

With the evenings starting to get lighter and spring just around the corner, this may be a question many of us ponder in the months ahead. This article is intended as a starting point for those considering if a solar panel system might be right for them.

Whether your motivation for considering solar panels is to bring down your energy costs or to reduce your carbon footprint, the installation of a solar panel system is a big decision and there are a number of variables to consider that can impact the value of this undertaking.

The potential effectiveness of a solar panel system on your home

Perhaps the most appropriate place to begin is to consider how well setup your home is to accommodate a solar panel system and how effective it is likely to be once installed.

The main variables that will impact the effectiveness of your system:

• Roof direction – to maximise the effectiveness of a solar panel system, a predominantly south-facing roof is recommended. However, an east to west orientation can also yield effective results.
• Shade – during peak hours, solar panels that are unshaded from trees or other buildings will be a lot more effective than panels that are shaded from the sun’s light.
• The hours you are at home – a solar panel system will work at its peak during daylight hours. Therefore, the system will be most effective if this is when you can use your household appliances, such as the cooker and washing machine. However, if you elect to purchase battery storage with your system, this issue becomes less important as you can use daylight hours to store energy for use in the evenings.
• The system and size – there are a range of solar panels and systems available, which an installation company can advise you on. An average sized system may be 4 kilowatt-peak, with 12-16 solar panels and take up around 20-25m² of roof space.
• Roof slope – whilst not as important as some of the areas above, an optimum roof slope for solar collection is an angle of 35%.

Costs and potential savings

Another important consideration is the financial implication. What are the costs and how long can you expect to wait until the system repays the investment?

According to analysis by the Energy Saving Trust[1], installation of a 4 kilowatt-peak solar panel system (without battery storage) will cost on average £6,500 for a three-bed semi-detached house. However, the size of your home and the amount of energy you want to produce will impact this cost.

Further analysis by the Energy Saving Trust estimates that a typical household with a 4 kilowatt-peak system can achieve a saving of between £210 and £515 per year on their energy costs.

If you don’t use all of the energy you generate, you can get paid for exporting surplus energy back to the grid under the Smart Export Guarantee (SEG). Tariffs can vary widely and the amount you receive can vary between 1p per kWh to 15p per kWh so it pays to find the best tariff available if this is something you may be considering.

Given the price you will receive exporting back to the grid is likely to be less than the price you would have to pay to purchase energy, it is therefore more cost-effective to make use of the energy that you generate. None the less, this is still a useful function. The Energy Saving Trust estimates a typical household could make between £80 and £110 per year exporting back to the grid at a rate of 3.99p per kWh.

Factoring in all of the above, analysis by Which?[2] and the Energy Saving Trust estimates it may take between 11 to 15 years to recoup the costs of installing a solar panel system.

Of course, the recent rise in energy prices may result in this number of years reducing slightly. Conversely, just as prices for everyday goods and materials have risen recently, so might the up-front costs of a solar panel system. An area to keep an eye on.

Inclusion of battery storage

Including battery storage with your solar panel system allows you to store generated energy to use when you need it, such as in the evenings when your system is no longer generating energy.

In addition to storing the energy you generate; you can also store energy purchased from the grid at cheaper times of the day, such as overnight to use the next day.

However, including a battery can significantly increase the initial cost of your solar panel system. Research by Which? suggests this can increase the cost by around £2,000 to £6,000, depending on the size of your system, property and energy needs, so again this is a decision that will need some consideration.

Practicalities of installing a solar panel system

Your roof will need to be in a good condition, and it is a good idea to have a roof inspection before embarking on installation. You typically won’t need planning permission, although there are exceptions to this rule, and you may need to check with your local authority before proceeding.

You can install solar panels ‘on-roof’, which is the most common, easiest and cheapest installation option. Alternatively, if you are planning to extend or reroof your property, an ‘in-roof’ installation might be a consideration.

Along with the solar panels, you will need to consider where there is space to install an inverter in your home. An inverter is needed to convert direct current (DC) electricity generated from sunlight into alternating current (AC) electricity which is used for household appliances. If you do opt to include battery storage with your system, space will be required for this too. One of our clients was recommended by their installation company to have the battery and inverter installed in the house or garage and not the attic because of the temperature variation and it being a dusty environment.

When searching for an installation company and installers, we highly recommend speaking with a number of installers and obtaining at least three quotes. You should also ensure the installer meets the standards of the Microgeneration Certification Scheme. An installer can provide you with a comprehensive overview of the types of solar panel systems available and help to find a system to meet the needs of your home.

Once installed, a solar panel system typically won’t need much maintenance and the panels are usually cleaned by rainfall. However, depending on the debris and dust around your home, you may need to have the panels cleaned periodically. Analysis by the Energy Saving Trust suggests the panels should last 25 years, but you are likely to need to replace the inverter during this period, at a cost of around £800, depending on the system. You can pay for extended warranties on the expensive elements of the system, such as the inverter, so this is something to consider when looking at the costs.

Reducing your carbon footprint

For some of us, the primary motivation for consideration of a solar panel system may not be financial. It may be out of a desire to reduce our reliance on fossil fuels, to use a renewable energy source within our homes and to reduce our carbon footprint. Analysis by the Energy Saving Trust suggests a typical home solar panel system could save around one tonne of carbon per year.

So, is it worth it?

As we’ve seen, there are many variables that need to be considered and this is not a decision to take lightly. Each case will be different, and it may be helpful to take some time to weigh up the pros and cons, such as how long you think you will remain at your property.

A helpful tool that may aid your decision making is The Energy Saving Trust’s Solar Energy Calculator[3]. This tool allows you to input many of the variables highlighted above for your own home. It will then provide you with a range of estimates for factors such as the potential fuel bill saving, potential lifetime saving of the system, potential carbon saving, estimated installation costs and estimated lifetime maintenance costs.

Given the analysis highlighted above suggests it could take 11-15 years to recoup the costs of a solar panel system, we certainly agree this is a decision to think about for the medium to longer term.

[1] A comprehensive guide to solar panels – Energy Saving Trust
[2] How Much Do Solar Panels Cost? – Which?
[3] Solar Energy Calculator | Energy Saving Trust