If you’re a savvy saver then there’s a fair chance that you can make yourself some cash by installing solar panels on your property. You might have heard about the government’s feed-in tariff, and you’ll also cut the costs of your electric bill too. But solar panels aren’t the right choice for everyone. Interested in just how you can save money with solar? Then read on to find out!
Solar Equals Savings (Sometimes)
The first thing that you need to know is that there are two kinds of solar panels. Solar thermal panels are used to heat water, thus saving you a little on your energy bills, but the panels that bring in the big bucks are known as photovoltaic solar panels. PV panels are the ones that the government’s feed-in tariff applies to. Installing these could bring you some nice, tax-free income, but there are some caveats.
There are a couple of limitations that you should keep in mind. The first is that you’ll need a south facing roof (or a roof that is more or less south facing), to capture the most sunlight. Got a roof of a different orientation? Then it’s probably not going to be worth the cost of installing the panels, since you won’t make enough money to offset these costs. Your roof should also be relatively free from shade (so few trees), or at least should be shade free between about ten in the morning and four in the afternoon.
The second thing is that you’ll need to get an energy rating for your building. You’ll need to contact an assessor that’s accredited by the government and get an Energy Performance Certificate. If you gain a grade of D or above, you’re good to go. If you get below a D however, you’ll be getting lower rates on that feed-in tariff, so again, it’s probably not going to be worth the cost of installation since you’ll be making less money.
Finally, the further south you live in the UK the more money you’re likely to make. This is pure geography, since the south experiences more hours of sunlight. Solar panels don’t need hot days to create energy, but they do need daylight, and southern homes simply get more of that.
The Cash Question
So how much are you looking at making? Given that you install PV panels on a south facing roof and your home has an energy rating of D or above, there are set rates that the government pays as part of the feed-in tariff. Meeting these conditions you’re looking at making 12.92p per kilo-watt hour. What does that add up to? That depends on where you live, and we’ll come to general estimates in a second.
Don’t forget though, that as well as earning money, you’ll be saving money on your own bills, since your home will use some of the solar energy for itself. A typical PV solar panel system should save you around £120 on your annual bill.
As for total savings, the Energy Saving trust estimates that the average household in Manchester could get around £635 per year in combined earnings from the feed-in tariff and savings on their own energy bills, whilst a similar house further south in London could get around £720.
You’ll need to factor in the cost of installation, however. Again, based on an estimate from the Energy Saving Trust, you can expect the installation of a typical PV solar system to set you back around £7,000.
If you’re worried about being tied down to one energy company, then don’t be. Any UK energy company that has over 250,000 customers is required by law to support the feed-in tariff, so you should still be able to switch around to get better rates if you want to.
If you’re worried about the value of your property, that’s another issue. The jury is still out on whether adding solar panels adds or detracts from house value, but it seems that it pretty much comes down to the buyer. Some buyers are tempted by the lower energy prices that solar equipped houses offer, whilst some are put off by being tied into a feed-in tariff contract, or even by the appearance of solar panels.
So, Do I Save Money?
Bottom line here is that there is the potential to save money with solar panels, though you’ll have to meet several conditions in order to make any cash at all. Given the right location and the right kind of roof, yes, you can. But as you can see from the installation costs this is a long term project, and it’s going to take several years before you begin making money above your initial investment, so it’s not a project for those planning on moving.
Installing solar panels on your property can be a great money maker for some, just be sure you know what you’re getting into before you start hauling those panels up onto your roof!