Putting solar panels on the roof of your house is a big decision and one that needs to be carefully considered. If you’re curious about generating your own solar electricity using photovoltaic panels, cutting energy bills and getting paid for selling solar energy to the grid, then there are a few salient questions you should be asking.
It’s easy to get confused about the different technologies available. Photovoltaic (PV) panels are designed to catch the sun’s energy and convert it into electricity that you can then use in your home for free. What’s more, a solar PV installation will allow you to earn money through the government’s Feed-In-Tariff (FIT). According to official government figures, more than half a million British homes now have PV panels installed.
PV panels are not to be mixed up with solar water heating systems. The latter consist of a number of ‘collectors’, which are solar thermal panels that are fitted onto your roof. They harvest the heat of the sun and heat up your domestic water that is stored in a hot water cylinder, while helping to reduce your energy bills. You will probably have a central heating boiler or immersion heater as a back-up for the winter when solar energy alone is not enough to meet your hot water needs.
In order to make the most of the available sun, it is recommended to place your solar PV panels on a predominantly south-facing roof. You will still get some benefit if you have a south-west or west facing roof but you may not be able to achieve maximum returns in terms of the amount of energy you produce. In the UK, north facing solar panels are impractical and the least effective direction.
For best results, your roof should be unshaded between 10am and 4pm when the sun is strongest. Some early or late shading from trees or other buildings shouldn’t have much of an impact.
Interestingly, the further south you live in the UK, the more effective your solar PV installation will be. Northern homes tend to get slightly fewer daylight hours, which impacts ROI.
Unless your property is a listed building or located in a conservation area, or you are considering a flat roof installation, planning permission should not be required. In England and Wales, domestic solar PV installations are deemed to be ‘permitted development’, subject to certain limits and conditions that must be met. That said, you will almost certainly need to get building control approval for the works carried out. If in doubt, check with your local council or look here and here.
What you do need is an Energy Performance Certificate (EPC) for your home in order to register for FIT payments. This is easy enough to get via a government accredited assessor and the certificate will be valid for 10 years. In order to be eligible for the full FIT amount, your home will need to be awarded Grade A, B, C or D. If you don’t make the grade, it’s highly recommended that you put in place the required improvements to qualify for the higher payments.
Energy efficiency has consistently been one of the top three considerations for homebuyers, alongside outdoor space and a garage. This means that your solar installation may well make your house more attractive to buyers and push up the value of your house.
However, a lot of it depends on how and when the installation was done. Unsightly panels stuck all over the roof may well have a detrimental effect on the aesthetic appeal of your home and what it’s worth. Older technology may give the impression, rightly or wrongly, of upcoming maintenance obligations, which may put some people off.
While solar panels are a major home investment, it is not necessarily the case that a big upfront outlay is immediately reflected by an increase in your property’s value. But a state-of-the-art solar installation that comes with the added benefit of ongoing FIT payments should go a long way towards making a property sale more appealing.
The Feed-In-Tariff (FIT) scheme is a government subsidised programme designed to promote renewable electricity generation. The FIT itself is the agreed fixed rate that is paid to you for each kWh (kilowatt hour) of solar energy you generate. It is income tax free, guaranteed for 20 years and index linked to protect against inflation.
The FIT rate is set by the government and is subject to change. The amount you receive will depend on when exactly you take out the tariff and how much electricity your solar installation generates. The current FIT rate is 3.93 pence per kWh for all energy produced by households in England, Scotland and Wales. Under current government proposals, however, this rate is set to fall to zero from 31 March 2019.
In addition to being paid for solar power generation, you will also be paid and export tariff for the unused energy you are selling to the grid (currently assumed to be 50% of the energy you produce). While currently this is set at 5.24 pence per kWh, the government proposes to reduce this rate to zero from 31 March 2019 also.
With technological advances, the cost of solar panels has come down over time. While you should allow a minimum of around £5,000 for a domestic system, the average cost of installations lies somewhere between £6,000 and £9,000.
While the benefits in terms of energy savings are irrefutable – energy prices are likely to go up over time – the financial viability of your system will depend not only on the initial outlay but also on how much you’ll be paid back down the line through government payments for generating electricity.
As it stands, investing in a residential solar installation will still give you a better overall return than if you put your money into a savings account. However, with government plans afoot to end FIT payments for new solar panels installed after March 2019, there’s really no time to lose to take advantage of existing opportunities.
