This content originally appeared in the MSE weekly email on 1 July 2015.
They cut your electricity bill and pay you for generating it too – but the amount you earn drops today.
Over 550,000 British roofs gleam with the reflection of solar panels. With savings interest so low, many have used them as an alternative place to stash cash, but the maths keeps changing. More in free or cheap solar panels, but in a flash...
- Is your roof south-facing? Photovoltaic solar panels generate electricity from the sun. For maximum efficiency, the roof you're putting them on should be predominantly south-facing, with little shade. For full tips, including whether you need planning permission and the impact on your home's value, see solar need-to-knows.
- How you make money. There are two ways (savings figures from Energy Saving Trust):
(a) You can use the electricity they generate, thus reducing your electricity bills – typically £100+/year saved.
(b) You also get paid a 'feed-in tariff' for ALL the energy you generate (it works differently in NI) – even if you use it, in which case you get the added benefit of savings too – typically £500+/year.
The feed-in rate dropped today (Wednesday) from 13.3p/kWh to 12.9p/kWh and may drop again from 1 October (in contrast, you pay 9-13p/kWh for electricity you use). Yet crucially, once panels are installed, your rate is fixed for 20 years and rises with inflation, so signing up sooner pays more. Of course, the key is how the amount earned measures against the cost of panels, and while the feed-in rate has dropped, panel prices have plummeted too. Full analysis in Does buying solar panels add up?
- Free solar panels. Here they fit them but keep the feed-in gain. See Free solar panels – are they worth it?