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Installing solar panels – are they worth it?

By danfernbankOn 39 Comments

Opinion: Dan Fernbank, Energy & Sustainability Director

With energy prices skyrocketing, I find myself increasingly being asked whether solar photovoltaic (PV) panels are good investments at home.  There is no one answer to this question, but set out below are my suggestions of points to consider.

Man on roof installing solar panel

The roof

Firstly, do you own your home?  If you live in a flat, it is likely to be leasehold and so any roof installation would need the permission of the landlord. Assuming you have the right to install a PV system, your roof needs to be between east and west facing – ideally as close to south-facing as possible and unshaded for most of the day.  Flat roofs are also suitable and any roof should also be in a reasonable state of repair.  If you need to do roof repairs in the next few years, that’s likely to be the ideal time for an installation, as much of the installation costs are for the scaffolding.  A reputable solar PV installer should carry out a survey and provide a report to assess the suitability of the roof and likely output of a system.  This will typically include the orientation, any shading and the roof’s structural suitability to take the weight of the panels.

The costs

Obviously, it is sensible to seek a number of quotes for an installation, and you should make sure any installer is registered with the MCS (microgeneration certificate scheme).  This not only gives you reassurance that they are a reputable installer, but in the event of the company closing down, you will continue to have a long-term guarantee on the installation.

Typically, a 3-4 kWp system will cost somewhere around £4,000 – £6,000 to install at current market prices (excluding any energy storage options), but the market does fluctuate, so comparable quotes are essential.  Reputable suppliers should not charge for providing you with a quote.

How big?

This is a tricky question to answer and will depend on a number of factors, such as:

  • How much roof space do you have?
  • How many people live in your home?
  • How much are you at home during the daytime?
  • Do you own/have plans to buy an electric vehicle?
  • Do you have electric heating, including a heat pump (or do you plan for one soon)?
  • Why are you installing PV panels? Cost or carbon savings – or both?

I will unpick these points in turn.

Roof space is an obvious consideration that will help determine how few or how many individual solar panels you can install.  I have 9 individual panels at home, with a total rated output of 2 kWp, which means, at the sunniest times (the ‘p’ stands for ‘peak’), they can generate 2 kW of power instantaneously – enough for about 200 LED light bulbs.  My system is 10 years old, and these days, 9 panels might provide you with nearer to 3 kWp – which is probably a more typical ‘average’ system size.

I didn’t realise for a few years that I wasn’t actually using most of the electricity my panels generated – it was being sold back to the national grid for a pretty low return.  To make better use of the system while I was out at work, I invested in a ‘hot water diverter’ system (around £1,000) which works like a simple battery – diverting excess electricity from my panels to run my immersion heater to generate hot water, instead of needing to run my gas boiler.  This has increased my household’s use from around 30% to around 70% of the generated electricity each year, saving significantly on my gas bills too.

A bigger system will obviously generate more electricity, but a 2kWp system is about right for my household of two relatively low consumers.  If you have a bigger household, are at home for most of the day, have an electric vehicle, electric heating and/or a heat pump, you’ll probably want to think bigger (assuming you can afford it).

Batteries

Electrical batteries are currently expensive, but can be a way of ensuring that you maximise of the electricity your panels generate.  In particular, they mean you can run on your stored renewable energy when it is dark.  Whether this is a sensible option for you will depend on your own specific needs, but the hot water diverter already mentioned might be a much cheaper solution to store energy if you have a hot water tank.  Other options that can help maximise the use of your generated electricity include heat pumps and electric vehicles, but are separate topics in their own right.

Are they worth it?

If your roof is suitable, then environmentally at least, solar panels pretty much always make sense.  The embedded energy used in the manufacturing of the panels typically pays for itself (in terms of energy generated from the panel’s operation) in 2-3 years – and the panels should last for 30+ years.  You can therefore make a very serious dent in your carbon footprint by installing PV.

There are many varying factors, already discussed, which will affect the financial savings the panels can deliver, but simple paybacks of between 8-20 years can typically be expected.  This depends on how much of the generated energy you use yourself as well as what you assume will happen with future energy prices.  Some suppliers offer something called an ‘agile’ electricity tariff, which varies the price you pay per unit of electricity depending on fluctuations in grid electricity demand levels.  This could potentially reduce solar PV paybacks further, as could the likes of a hot water diverter (if you have an immersion heater) or charging an electric vehicle.

While you can get paid a small amount for any electricity you export to the grid, the real financial benefits are in the savings you make on your bills.  It is typically assumed that household systems export 50% of their electricity to the grid.  If you have a smart meter however, that will be capable of measuring the exact export.

In summary, solar panels can be a great investment for the long term and hopefully this article provides some food for thought as you explore their potential further.

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