As the cost of living rises and energy bills continue to rise, UK households will look for ways to reduce their monthly outgoings. While there are some ways to save money at home, many people seek long-term solutions for lowering their electricity bills.
According to Shane Hickey, The Observer, homeowners are looking for ways to reduce the cost of energy in the UK. Installing solar panels is one “ray of light”.
A government report from 2020 shows that more than 970,000 homes in the UK have solar panels. These numbers are increasing rapidly, according to Amy Cutmore of Ideal Home. You’ve likely noticed an increase in solar panels on roofs across the UK. This trend seems to be set to continue.”
As more people work remotely, the demand is increasing. But, Hickey wondered, “Does the cost of installation pay off?” We examine the opinions of experts on solar panel investment and installation in 2022.
What are the advantages of solar panels?
Attila Tamas Vikony stated that solar panels make use of the sun’s energy. The panels use semiconductor technology to convert sunlight energy into electricity that can be used to power your home. There are two types of photovoltaic panels: one that produces electricity and the other that is used for heating.
Solar panels offer the following key benefits:
All year electricity
Reducing your carbon footprint
Increase the value of your property
You can make money with excess energy that you produce
According to the Energy Saving Trust, solar panels can also reduce your electricity bills. The Energy Saving Trust states that solar panels are free and will reduce your electricity bills once you have paid for the installation.
What is the cost of installing solar panels?
According to Josh Jackman, solar panels are “exploding in popularity” as more people choose to be sustainable. In the last three years, installations have increased by 45% and “increasing numbers of households are realizing the value in solar power and are taking advantage of it”. According to government data, the cost of solar panels fell by 88% between 2010 and 2010, and it happened “just in time”.
Hickey, in The Observer, stated that installing solar panels “still comes at a price”. Installation costs average almost PS5,000, and prices are rising due to rising labour costs and shortages in photovoltaic panel. An average cost for a 3.5 kilowatt peak (kWp) installation is around PS4,800. This includes labour. “This is usually about 12 panels.” A 3.5kWp system will require 15-20m2 of panels.
According to the Energy Saving Trust, a 4.2kWp domestic photovoltaic system will cost around PS6,500. The cheapest option is to put panels on the roof, while tiles will cost you more. We recommend getting estimates from at least three different solar panel installers near me.
Rishi Sunak, the Spring Statement’s chief executive, announced that homeowners will no longer have to pay VAT for energy-saving devices such as heat pumps and solar panels. This could reduce the cost of installing solar panels by as much as PS1,000, according to Rishi Sunak, the chancellor.
How much can solar panels help you save?
Andrew Capstick, MoneySavingExpert, stated that solar panel “maths” are “getting better”, but they’re not as lucrative as they used to be. Although the cost of solar panels has dropped over the years, energy bills are soaring and “generating solar power and using that yourself is a much bigger savings now than it was in the past.”
Capstick said that the biggest benefit comes from “using what your generate” – this could help you save up to PS440 per year on your bills. Energy Saving Trust estimates show that a household with a 3.5kWp system could save between PS170-PS440 annually on their bills, according to Capstick.
Tamas Vekony, GreenMatch.co.uk’s Tamas Vekony stated that there are incentives such as the Smart Export Guarantee (SEG) which allow you to export surplus energy back into the grid.
The SEG was launched 1 January 2020 and is government-backed. The SEG requires electricity suppliers (SEG licensees), to pay small-scale generators for low-carbon electricity. They then export to the National Grid if certain criteria are met.
The verdict: Are solar panels worth the investment?
There are many eco-friendly ways you can reduce your running costs and increase the value of your home. But solar panels are an exception, according to James Forrester, estate and lettings agent Barrows and Forrester. Although solar panels are a common way to reduce the carbon footprint of a house, they seem to “do very little” for added value.
The installation is costly at around PS5,875, with a value added of PS1,916, which is a loss in terms of -PS3,959. The agent stated that there are clear savings to be made by reducing utility bills. However, solar panels could still provide good savings if the owner plans to remain in the house for many years.
Jackman, The Eco Experts said that solar panels are “worth it”. Because the sun shines brighter in different parts of the UK, how profitable your solar panels will be depends on where you live. It is natural that different regions have different break-even point. It takes East Anglia 10.21 years to break-even, while it takes 14.84 years for northern Scotland.
Even though it costs a lot upfront, Tamas Vekony from GreenMatch said that solar energy investment can yield a “great return over the long-term”.
