Is using solar energy at home cheaper?

Ned Browne

Should you be making the switch to a solar-powered home?

Renewable energy definitely represents the future of power generation, but do the economics work?  Over the next few months, we’ll look at how to green your property and, hopefully, save money too. This month it’s the turn of solar panels…

 

How efficient are they?

The efficiency of solar panels has improved dramatically over the decades.

The most efficient available for domestic use are made by SunPower (22.2%), Panasonic (20.3%) and LG (20.1%).  Efficiency is measured by the panel’s ability to convert energy from the sun into electricity. 

These numbers may sound low but, in the 1950’s, the best solar panels returned just 6%.

But, the future could be even more exciting. NASA is using solar panels that are 40% efficient. These specialist panels are super-expensive to produce. But, as with all new technologies, costs are likely to fall.

 

How much do they cost?

Solar panel kits start at about £2,800 and you can double that if you want to add battery storage.  

Of course, if you have a large roof, this can rise in accordance with the number of panels you use. But, economies of scale do apply—the more panels you install, the lower the cost per panel.

 

Are solar panels worth it?

This is the million-dollar question. It’s reckoned that a £6,000 panel and battery kit from e-on will save you £400 a year.  

Most panels come with a 25-year guarantee, so that would indicate a payback period of 15 years. But, there’s the opportunity cost too. Maybe that money could be put to better use?

 

Is my property suitable for solar panels?

Most solar panels are fitted on roofs—as such, the larger your roof, the better

Also, you need to ensure your roof isn’t in the shade; overhanging trees, for example, would significantly reduce the amount of electricity produced.

E-on have an online solar calculator, which allows you to find suitable solar packages for your home: www.eon-solar.co.uk

 

What else should I consider before going solar?

It’s hard to argue that the UK has the perfect climate for solar panels—those living in California are always going to win. But certain areas in the UK get far more sunshine than others—do your research.

There are other things to consider too such as warranties, durability and aesthetics.  

Most solar panels sold in the UK are fitted onto roofs. The newer wave of solar panels effectively replace your roof tiles—if you need a new roof, these are an interesting alternative.

Most energy providers also provide a free home solar survey, the idea being that they will be able to propose a system that’s right for your home.

 

In conclusion…

One of the issues with solar panels is the up-front cost. If you decide to sell your home, you’re unlikely to be able to pass on the cost to the buyer. But, if you plan to stay put, you should be able to recoup your money over the long term. This is especially the case if you need a new roof.

But, from a purely financial point of view, for most people, now is not the time. But, if costs continue to fall and efficiency continues to rise, the time may be soon.