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Solar Panels Should you buy or get them free?

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solar panel man Solar panels can mean big bucks. They reduce your electricity bill and pay you for generating power. While the 'feed-in tariff' you get for generating electricity has been cut, they can still be worth it, plus you can install them for free.

This guide takes you through whether solar panels are right for you, how much you can earn, if free panels are worth it and how to get them fitted safely.

We've made every effort to ensure this guide's accuracy, yet it doesn't constitute legal advice tailored to your individual circumstances. If you act on it, you do so at your own risk.

Solar panel need-to-knows

"Solar power? Hang on, we don't live in California!" Yet it's all about daylight, not sunshine, so panels can still generate some electricity on gloomy days - vital when the weather's as dull as watching Steve Davis watching paint dry.

Yet before you stick them on your home, understand these key need-to-knows.

1Want solar panels? How to install

Install solar panels and you get paid a 'feed-in tariff' for the energy produced, even if you use it yourself. The tariff you get depends on when your panels are fully installed and registered. Once you've done that, your rate's guaranteed for 20 years.

Every now and then, the Government lowers this tariff, and the last cut was on 1 April 2014. Full feed-in cuts info

2You need a south-facing roof

You usually need a roof that faces roughly within 45 degrees of south, with no shade from other buildings or trees. While some early or late shading is okay, the roof should be unshaded between 10am and 4pm. If your roof doesn't fit this criteria, you may not be able to get maximum payments with solar panels.

3You save on electricity bills

The Energy Saving Trust estimates a typical 4kWp system can knock £125 off a family's bills each year. Electricity prices are predicted to rise massively over the next 20 years, which means the amount you'd save would as well.

The savings depend on the system size, electricity use, whether you're at home during the day and other factors.

4Panel prices have dropped

The Government may have slashed payments for generating electricity, but the price of a typical (4kWp) solar panel system, including installation, has dropped to about £7,000 (£6,000-£6,500 in some cases). A system this size used to cost £10,000 to £12,000.

So while the feed-in's less each year, getting panels has become cheaper. See our full analysis - should I buy solar panels?

5You may be able to get solar panels free

If you live in certain parts of England and have a suitable roof, a company may offer to fit panels free. In return, it keeps the feed-in tariff cash. You just get the £125ish electricity savings (though energy prices are predicted to rise).

It's tough to meet the eligibility creteria, though, and these deals are getting rarer now the feed-in tariff is being cut. To check if it's right for you and what to watch out for, see Free panels.

Quick questions

How exactly do solar panels work?

Do I need to live in a sunny area?

Who pays the feed-in tariff and how often?

Should you buy solar panels?

If you've £7,000+ knocking about, you could get some of this back in electricity savings and feed-in payments for the energy you produce.

The key to all this is that with the current feed-in tariff:

A typical system costs £7,000, but over 20 years, the feed-in payments and electricity savings could add up to roughly £16,000.

Solar panels used to be a no-brainer. When the Government launched the feed-in scheme, people typically got a gobsmacking £1,100+ per year in payments. The cash was guaranteed for 25 years, so that was at least £27,500 back - not taking into account electricity savings.

The Government slashed these payments so £630 a year is typical (at current feed-in rates), rising with inflation. Payments are now only locked in for 20 years, paying out £13,000 in total.

At the same time, solar panel prices have dropped. A typical system now costs around £7,000 rather than £10,000.

The cost-to-return ratio is less attractive now and it's far from a guaranteed win at this level, though there are, of course, environmental benefits. You should do your sums carefully and explore other options, for example Top Savings accounts.

Who is this best for?

Ideally, you'll be planning to stay in your home for a few years to recoup some of the cost, though buyers may be attracted by electricity savings and feed-in payments.

Whether it's right for you depends on system size, location, whether you're at home during the day and other factors. Use the Energy Saving Trust's Solar Panel Calculator to estimate the gain or call it on 0300 123 1234 for more advice.

You also need an Energy Performance Certificate of grade D or above to qualify for full payments. The Government estimates about half of all properties qualify.

If your home doesn't make Grade D, it may not be worth it - typical payments on the current feed-in tariff would be just £340/year.

Quick questions

How much can I earn via the feed-in tariff payments?

Can the Green Deal help pay for solar panels?

Will the feed-in payments definitely last for 20 years?

How can I make the most of solar panels once I've got them?

How do I pick a fitter?

Solar panel fitters: Don't be fooled

What happens if I sell my house?

Can I change electricity providers?

What if the solar panels break?

Do you need planning permission?

Can you get free solar panels?

It's possible to find companies that offer to fit panels worth £7,000 for free. However, you don't get paid - it keeps the lucrative feed-in tariff. So if you have £7,000 knocking about, you may be better off buying panels yourself.

With free panels, you still get the £125ish per year electricity savings. By setting your appliances to use energy during daytimes you can increase this sum, plus prices are predicted to rise hugely over 20 years, which means your savings will rise too. Another bonus is that the firm maintains the panels and pays for insurance.

Before the payments to generate electricity were cut, there were a lot of free solar panel companies. Now many have pulled out.

But with so few providers it's now harder for some to get free panels. That's before you even factor in criteria including the requirement for a south-facing home, while they only install in certain areas anyway.

One free provider we were able to check out which has an established track record, is A Shade Greener*. There are a few smaller companies doing the same which may well be legitimate, but it's harder to check them out.

Who can get this?

A Shade Greener covers parts of north and south-west England, plus the Midlands. See a map of the areas it covers. You need to own your home. If you live in Cornwall, Kent, East Anglia or London, check if you're eligible.

Your roof must usually be 24 square metres due south, or within 35 degrees of south. Maintenance is included and A Shade Greener pays for the insurance.

Is it any good?

It has some good feedback from forumites and there are no charges at all, even if you need non-standard scaffolding. It also insures you, so repairs won't cost you a penny. A Shade Greener also says it has never had an insurance claim.

But once you sign up, you can never buy the panels - A Shade Greener will always own them.

How does the company still make money?

A Shade Greener says the business is funded up to £380 million by pension companies and investors, is financially in good shape and is still making around 350 installations each week. The company has fitted around 31,000 systems in total, and it's still receiving the high Government feed-in payments for those homes.

What to watch out for with free solar

Your home is your most valuable asset, so think very carefully about what it means to sign up for a 25-year commitment. Don't read this as a "don't do it". It's a "be prepared that if you do it, it may not be plain sailing".

Read these key free solar panel points

Check with your mortgage provider

Ask the right questions

Check your contract carefully

You are signing up for a contract for two decades

What if the free solar company went bust?

Roof repairs can be tricky

Crucial tips to save £100s on energy bills

Solar panels are a big move. First, ensure you're on the cheapest energy tariff and do the energy-saving basics.

Switch energy provider

Ditch and switch energy provider and you can save £100s each year. Our Cheap Energy Club checks you're on the cheapest deal and if you're not tells you the best deal. Plus we'll keep monitoring your tariff and the market to ensure you're always on the cheapest deal. To encourage you, there's usually up to £30 extra if you switch gas and electricity via the club.

It's the same gas, the same electricity, the same safety. All that changes are the customer service and the price you pay. Normally, switch and you risk the provider hiking prices, or giving you a cheap deal for 18 months then ramping costs. So every month, without you doing anything, we do a comparison for you, and alert you when it's worth switching again.

Can you switch energy with solar panels?
Yes. You don't have to get your electricity supply and feed-in tariff from the same company. That means solar panel users can switch freely on Cheap Energy Club, just like everyone else. After switching, payments still come from the current feed-in tariff provider, so nothing changes.

If you want to switch to a different company that pays you the feed-in tariff, contact your feed-in provider to see if it's possible. Usually, if you want to get the payments from a different supplier, you'll have to switch energy to that company too. As feed-in payments are fixed and therefore the same across every provider, it may not be necessary.

At application stage, you can't choose a feed-in provider you want, you have to get the feed-in payments from your current energy supplier. A full list of feed-in tariff providers - or 'licensees' - is on Ofgem's website.

There are more ways to cut energy costs, such as always paying by direct debit, which shaves £100 or up to 8% off your annual bill. For a full list of tips, see Cheap Gas and Electricity. If you're on Economy 7, you can slash costs even further by using storage heaters, washing machines and dishwashers through the night. See our Economy 7 guide for full info.

Free insulation and boilers

The big energy providers are giving wads of freebies to people on benefits, from new boilers to insulation. It's because they have to help certain groups save energy.

New boilers alone typically cost £2,300, so this is a fantastic freebie. A boiler is a big contributor to your energy bill - so the more efficient your boiler, the more heat it produces from each gas unit.

Depending on its age, a shiny new efficient one could save you up to £300/year. (These figures may be revised in March.)

Wall and top-up loft insulation can slice up to £160 off energy bills per year. You could qualify if you get tax credits or income-based benefits, such as pension credit or income support.

To speedily uncover these crocks of gold, including a rundown of current offers, see the Free Boilers and Insulation guide. Also see Home and Energy Grants for a full list of hidden cash.

Do the energy-saving basics

If you wander round the house in boxers or bra 'n' knickers with radiators on full and windows wide open... STOP IT!

Sensible changes can save you large, from draft excluders to setting washing machines to 30°C, and low-energy light bulbs to notching down the thermostat. Get more energy-saving tips in our Energy Mythbusting guide.

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