We all know solar panels can save you money, and that’s music to the ears as our energy prices are going through the roof, but exactly how much money can you save?
Having solar panels installed at your home will cost around £6,000, depending on how many panels you install and where you live, so you’ll be out of pocket for a while until the savings you make start to mount up.
Here the team at Adrian Flux assess the savings you will make on the power you use and the income you will generate by selling your excess electricity back to the grid.
Solar panels more beneficial as energy costs skyrocket
As the price of energy has risen, generating solar power and using it yourself is a far more attractive option than it used to be.
Under the smart export guarantee (SEG) scheme, which launched in January 2020, households get paid for solar energy they ‘export’ back to the national grid as it can be used by other people.
How do panels help you save money?
Your solar panels will generate electricity which you can use, meaning you won’t have to pay a utility company for it.
The exact savings you can make will depend on how many panels you have and how much electricity you use. The Energy Saving Trust estimates that a typical household with a 4.2 kilowatt-peak system can shave £165 to £405 a year off their bills.
The smart export guarantee requires energy suppliers with more than 150,000 customers to offer ‘tariffs’ to households in England, Scotland and Wales, which pay a set rate for each kilowatt hour (kWh) of electricity generated by domestic solar panels.
Once you have chosen your supplier, if your solar panels generate more power than you use, the trust estimates you can earn around £110 a year based on an average 3.99p per kWh. But the amount energy companies pay varies from as low as 1.5p per kWh to 10p per HWh. Ofgem provides regular updates on the tariffs offered by energy companies so you can check the going rates.
The break even point
Based on the Energy Saving Trust’s figures, it could take someone around 15 years to recoup their initial £6,000 outlay, at which time they would start earning cash from the excess energy generated by their solar panels.
The trust has a solar panel calculator that can provide a more accurate assessment of how much money you can save and how much you can earn through installing your own domestic solar panels.
There are no grants available to help finance new solar panels for your home but you can get help with other home efficiency improvements. Read our blog to find out about the Green Homes Grant.
Photo by Kindel Media.
Insurance for your solar panels
You won’t need to get planning permission to install solar panels in your home, unless you live in a listed building or in a conservation area. But you will need to notify your insurer before work begins.
Call Adrian Flux on 0800 640 8602 for a swift no-hassle quote on your eco home insurance. Our green home policies can also cover solar panels. Our household insurance customers saved an average of 31% in 2021 when taking out a policy with us – even bigger savings can be made if you take out a combined building and contents policy.