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Cheap or Free Solar Panels

Is it worth fitting them?

Solar panels can mean big bucks. Photovoltaic panels generate electricity from the sun, and not only do they cut down on your energy bills, you can get paid for generating energy too.

While the rate you get for generating electricity has been cut and will be again on 1 October, installing solar panels may still be worth it. This guide takes you through whether solar panels are right for you, how much you can earn and whether free panels are worth it.

The feed-in tariff pay-outs drop on 1 Oct, so go quick if you want it. See what the changes mean.

Plus, the government has also announced proposals to cut the feed-in tariff by 87% (from 12.92p/kWh to 1.63p/kWh) from Jan 16. It's in consultation at the moment so might not go ahead, but with the already-announced drop in the feed-in tariff from October, go now and secure the highest rate possible.

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!" True, but it's all about daylight, not sunshine. Panels can still generate some electricity on gloomy days, vital when the weather's as dull as watching paint dry.

Before you stick them on your home, understand these key need-to-knows:

There are two types of solar panel

The type we're talking about is photovoltaic solar panels – also known as solar PV – which catch the sun's energy and convert it into electricity that can be used to power household goods and lighting. The other type is solar thermal, which allows you to heat water and can cut down heating bills.

This guide shines a light on solar PV, as that's where you can earn money through generating your own electricity through the 'feed-in tariff', as well as save on your electricity bills. According to the Department of Energy and Climate Change, over half a million British homes have panels installed.

You need a south-facing roof

To maximise what your panels can make, you usually need a predominantly south-facing roof. If your roof faces south-west or west you'll still get some benefit, but it may be less effective and you might not get the maximum savings.

While some early or late shading from other buildings or trees is okay, your roof should be unshaded between 10am and 4pm.

You need a grade D Energy Performance Certificate

An Energy Performance Certificate (EPC) rates a building on its energy efficiency, from A (highly efficient) to G (inefficient). Once you get one, it's valid for 10 years. The amount you get paid for generating electricity depends on your building's rating, and you'll need one to register for feed-in payments.

If you've got a grade D or above, you'll be able to bag the full feed-in payment of 12.92p/kWh, but if your property scores below a D you'll only be eligible for the lower rate, which is less than half at 5.94p/kWh.

The full rate could make you an estimated £515/year (typical rate for a home in Manchester), whereas the lower rate would only bring in around £235/year. So if you're assessed and rated E or lower, it's worth making the advised improvements to reach grade D before you register for the feed-in payments – remember, the feed-in rate is guaranteed for 20 years once you've registered.

The Government has an online tool to help find an accredited assessor.

You can still switch energy supplier

Don't, for heaven's sake, think this locks you into your energy provider so you can't get cheaper bills (join the MSE Cheap Energy Club to stick on permanently low prices).

The feed-in tariff is supported by a number of suppliers, as it's mandatory for those with over 250,000 customers. Ofgem has a list of all of them on its website. Yet you don't need your energy supplier to be the same as the supplier that pays your feed-in tariff, so you're free to switch around.

The further south you live, the more you can make

While you don't need a summer home in Hawaii to get some juice from solar panels, the further south you are can make a difference when it comes to their effectiveness. Remember, this is about daylight, not hours of sunshine. Northern homes get slightly less, so where you live needs to be factored in.

The Energy Saving Trust estimates that panels in Manchester could earn you and save a combined £635/year on bills, compared with around £725/year in London and £595/year in Edinburgh. Though this will drop from 1 October. See Does buying solar panels add up? below for full analysis.

Panels could push your house's value up or down

Some people worry that ugly panels plastered all over their roof could push the price of their house down. However, equally, a more efficient home generating its own energy may be more attractive to buyers.

Solar panels are a fairly hefty investment and might not be suited to those planning to move in the next few years – certainly you shouldn't expect a big upfront investment to be immediately reflected by a jump in your home's value.

Be wary that being tied in to a contract that remains with the property once you've left could be unattractive to buyers, whereas a buyer's ability to benefit from the feed-in tariff once they move in might make your house more appealing.

Think about how visible the panels are and ask local estate agents for their experiences before installation. When we asked the National Association of Estate Agents for an overview, it told us:

Solar panels can indeed affect the value of a property, in both a positive and negative way. If the panels are new technology, show significant savings and are aesthetically acceptable, they may very well boost value. However, in some instances, the agreement which ties respective owners into old technology is onerous and could well affect the value of a property in a negative way.

You shouldn't need planning permission

You don't generally need planning permission for solar systems. The big exceptions are if your property has a flat roof, is listed or in a conservation area. You might need to get approval from your council's building control team, so check with your local authority. If you get a free system, your provider will normally do this for you – but always check.

In England and Wales, the Government's Planning Portal says that panels are likely to be considered as "permitted development".

Solar panels are generally low-maintenance

The Energy Saving Trust says little maintenance is required on a properly installed, well-designed solar PV system, though you'll likely need to replace the inverter – a gadget which is a key part of the mechanism – within about 20 years (£800ish).

Of course, though, things can go wrong. Check the installer warranty you get covers the 20 years you'll be getting the feed-in tariff. If the panels are damaged by something unexpected, like a storm, you may also be covered by buildings insurance – check with your insurer before you have them installed and bear in mind you may need to increase the sum insured.

Use your solar panels at the right time and you'll max their value

Once you've got your panels installed and they're up and running, make sure you make the most of them by using them at the right time.

For example, in the winter, when there's less sunlight and you'll generate less solar power, you'll take more energy from the grid. It's a good idea to set appliances to run while it's light outside, staggering them to max the savings.

For tons more top tips from solar nerds, read the forum's Make the most of solar panels thread.

Does buying solar panels add up?

Buying solar panels is all about the payback time. Effectively, you're shelling out now and hoping to recoup the cost, and more, later down the line. The key is to think about how long it'll take to recoup the cost and when you can expect to start making money. Thinking caps on, here comes the maths bit...

How much can you make?

Install solar panels and you can benefit in two ways:

  • Electricity savings. First and foremost, you can use the electricity your panels generate, thus reducing your electricity bills. The Energy Saving Trust estimates a typical 4kWp system can knock £120ish off a family's bills each year (this is based on solar panels in Manchester and will vary depending on how far north you are).

    Savings depend on the system size, electricity use, whether you're at home during the day to use the energy you're producing and other factors. If you can use more energy during the day when the panels are generating, you'll save even more as you'll need less electricity from the grid.

  • The 'feed-in tariff' (which is being cut). You also get paid a 'feed-in' tariff for ALL the energy you generate – even if you use it, in which case you get the double benefit of savings too.

    There are two elements to this – a 'generation tariff', which is payment for energy you produce, and an 'export tariff', for energy you don't use which is sent back to the grid (unless you have an export meter, it's normally assumed there's a 50:50 split). The rates for both depend on when your panels are installed and registered, but after that they're guaranteed for 20 years, and are index-linked, so they rise with inflation. The feed-in tariff is income tax-free and is paid quarterly by energy suppliers.

    The Energy Saving Trust estimates that for panels installed and registered at a typical home in Manchester between 1 July 2015 and 30 September 2015, you could typically earn £515/year under the current feed-in tariff. That combines the rate for each unit you generate (12.92p/kWh) with the rate for what you send back to the grid (4.85p/kWh).

    The feed-in tariff pay-outs drop on 1 Oct, go quick if you want it. It's being cut from 12.92p/kWh to 12.47p/kWh so you'll get about £15/year less (£10/year in Scotland). It can take 4-5 weeks to get panels installed and registered, so there isn't much time. The dropdowns under the tables below show what you can earn from October.

    (The feed-in tariff covers England, Scotland and Wales, but not Northern Ireland.) Read more about how payment works in Northern Ireland

How much do they cost?

The Government may have slashed payments for generating electricity in recent years, but the price of a typical solar panel system, including installation, is now around £5,000-£8,000. In the scheme's early days, a system this size used to cost £10,000-£12,000.

So, are they worth it?

If you're thinking about installing solar panels, you're going to need to do the sums first.

You can start by doing back-of-the-envelope calculations based on typical prices for your area, though you'll need more precise estimates before going ahead with installation. We've sketched out the key figures you need to work out below (based on estimates from the Energy Saving Trust for a typical house in Manchester).

Of course, what you can earn can vary hugely depending on lots of factors – for example, how many panels you can fit on your roof and how much of the energy you generate you're able to use. The table below shows the Energy Saving Trust's estimates for a typical house in four locations – plug your details into its solar calculator for a more precise estimate.

How much can you earn and save?
Income generator Savings and/or earnings per year
Region London Aberystwyth Manchester Edinburgh
Generation tariff (1) £495 £460 £435 £410
Export tariff (2) £95 £85 £80 £75
Electricity bill savings £135 £125 £120 £110
Total/year £725 £670 £635 £595
Source: Energy Saving Trust. Correct from 1 July 2015. Payment scheme covers England, Scotland and Wales, but not Northern Ireland. (1) Amount paid for all energy produced. (2) Extra amount paid for energy exported back to the grid.

How much you can earn and save from October

Getting solar panels is a lofty investment, but over 20 years the feed-in payments and electricity savings could add up to roughly £12,700 (based on a home in Manchester), with you likely to break even in about 10 years. Here's how the figures stack up.

How much you can make over 20 years on a £6,500 system? (Manchester)
Time Total savings and earnings Profit/loss
Year 1 £635 -£5,865
Year 5 £3,175 -£3,325
Year 10 £6,350 -£150
Year 15 £9,525 £3,025
Year 20 £12,700 £6,200
Source: Energy Saving Trust. Warning: these are estimates and assume panels don't develop faults. An £800ish inverter (which converts electricity into power for the home), is sometimes needed within 20 years. Based on a home in Manchester.

How much you can make over 20 years from October

According to the Energy Saving Trust's calculator, for a typical London house it'll take around nine years to break even, whereas in Edinburgh it's 11 years, though of course it could be quicker or longer based on your circumstances.

Back in the day, solar panels were a no-brainer. When the Government launched the feed-in scheme, people typically got a gobsmacking £1,100+ per year in payments. That cash was guaranteed for 25 years back then too, so that was at least £27,500 back – not taking into account electricity savings. That said, they used to be much more expensive to install.

How to install solar panels

If you think solar panels are for you, here's how the installation process works...

Step 1: Find an installer

Call local installers to get the best price. Both the system and the installer should meet the standards of the Microgeneration Certification Scheme (MCS). Get at least three quotes before deciding.

Solar InstallerAs we're MoneySavers, not electricians, picking installers isn't our speciality. You can see the firms shortlisted for the British Renewable Energy Awards 2015, run by the Renewable Energy Association, or ask friends and colleagues for local recommendations.

As always, get at least three quotes, and get 'em in writing. When comparing quotes, check the following are included: scaffolding, removal of the existing roof and other roofing works, internal wiring works, sorting out a connection agreement with the energy supplier, electrical connection work, and a generation meter.

What else should I watch out for?

Step 2: Get them installed

Installation typically takes place up to four weeks after you've booked with an installer. Bear this timescale in mind when planning what feed-in tariff you'll be able to register for.

Fitting the panels themselves is a one- or two-day job.

Step 3: Register for feed-in payments

Once the panels are in, the installer will send you an MCS certificate. You can then register for feed-in payments with a licenced energy supplier.

Send a completed application form with the MCS certificate, Energy Performance Certificate, proof of purchase and ID. Sometimes you can ask your installer to email these documents to you, so you can forward them to the supplier. If you send them by post, it's best to send them recorded delivery.

Pay with a credit card for extra safety

Pay by credit card for something over £100 and Section 75 laws supercharge your consumer rights. Unlike with debit cards, cheques and cash, pay in full or part (even just £1) on a credit card, and by law the lender's jointly liable with the retailer.

This means you have exactly the same rights with the card company as you do with the retailer, so if it goes bust, you can simply take your complaints there instead and get money back if no delivery. See the Section 75 guide for a full explanation.

If paying by debit card, there's also valuable hidden protection that means you may be able to get your money back if something goes wrong. It's called 'chargeback' and applies to most debit and charge cards, as well as Visa, Mastercard and Amex credit cards – though it isn't a legal requirement. See the Chargeback guide.

Will solar panels make my meter clock backwards?

After having panels installed, you might find that your electricity meter starts running backwards when the energy you haven't used is exported back to the grid. This is because some analogue meters don't have backstop built in to stop them winding the wrong way.

If you notice this happening, the best thing to do is to get in touch with your energy supplier so it can exchange the meter for one which is suitable. For more information, see this Which? guide to meters clocking backwards.

Free solar panels – are they worth it?

Some companies offer to fit panels free, but crucially you won't get what's usually the biggest benefit of solar panels – the feed-in tariff. With free panels, the company that installs them gets to keep this. You do, however, get the benefit of saving money on your energy bills, and the firms also maintain the panels and pay for insurance.

Bear in mind you may not be able to buy out your contract, so once you've got the panels, the house is stuck with them – particularly worth bearing in mind if you're likely to move and are worried about how your home's value may be affected.

Before the payments to generate electricity were cut, there were a lot of free solar panel companies. Now many have pulled out, and it can be harder for some to get free panels. We've listed the main remaining free solar panel provider below.

Free solar panels for homeowners across much of England

A Shade Greener*

A Shade Greener* has fitted free panels to over 55,000 homes to date. Panels are fitted free under the government's FiT Scheme, which launched in 2010 as a way to encourage people to use more renewable energy.

Who is eligible? A Shade Greener covers much of England – you can see a map of the areas it covers (excludes Scotland, Northern Ireland and most of Wales). It doesn't routinely cover inner London, the South East or Cornwall, though if you live there it advises you apply anyway to see if you qualify.

You need to own your home, or get the permission of the homeowner if you rent. Your roof must usually be around 24 square metres, facing due south, or within 55 degrees of south. Maintenance is included and A Shade Greener pays for the insurance. The company also says it will fix your roof in the event it is damaged by the panels.

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 says it has never had an insurance claim. But once you sign up, you'll need to agree to a 25-year lease. You can't buy the panels, but after 25 years, they are yours to do what you like with. Or you can ask A Shade Greener to remove them, which they'll do free of charge.

Can you buy the contract out? The panels and the 25-year agreement for them stay with the property – there's no buyout clause. It doesn't affect mortgages or re-mortgages, though – mortgage providers can terminate the lease at any time, thanks to a break clause in the agreement.

How much can you save? According to A Shade Greener, its customers often save much more on their bills than the £135 the Energy Saving Trust says is typical for solar panels in an average household.

The Energy Saving Trust bases its estimate on users consuming 25% of the energy they generate. A Shade Greener says its users consume a higher proportion and claims they save an average of 37% a year on their electricity bills, with a quarter saving as much as 50%. However, these figures are from research carried out in 2011 – A Shade Greener wasn't able to provide more recent figures.

How does the company make money? As with other companies offering free panels, A Shade Greener gets to keep the feed-in tariff. It also says the business has up to £500 million in funding from pension companies and investors and is financially in good shape. It has fitted around 55,000 systems in total and is currently making around 400 installations each week.

A new type of free solar is emerging

Some firms are how starting to offer free solar panels under a new model. There's still no upfront cost, but not only does the company get to keep the feed-in tariff, it also charges you for the energy you use that is produced by your panels (albeit at a lower rate, so you can hopefully save on bills).

One firm that does this is SunEdison. It says you can save up to 15% on energy bills, as the amount it charges for the electricity generated is cheaper than buying from the grid – so the more energy you use in daylight hours, the more you can save.

However, as it's a 20-year agreement, if you move house the buyer will either have to take the agreement on or you'll have to pay to have the panels taken off the roof.

This is a fairly new scheme, and we've had little feedback on it as yet – let us know what you think in the forum.

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 20+ 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".

Other key free solar panel points

Check with your mortgage provider

Ask the right questions

Check your contract carefully

What if the free solar company went bust?

Roof repairs can be tricky

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 your old boiler's age, a shiny new efficient one could save you up to £300/year.

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 run-down 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 the 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.