Can I save money with solar panels?

We take a closer look at the possibility of saving with solar panels.

When the sun has got its hat on, most of us have a warm feeling inside. But what about if you've had home solar panels installed? Could there be another reason to be cheerful?

According to the Energy Savings Trust, up to $645 a year could be earned through savings and income, under a Feed-In Tariff (FIT).  

What is solar energy?

The UK might not be sun-kissed, especially during the winter, yet home solar power systems, also called solar photovoltaics (PV), use photovoltaic cells to capture daylight, not just the sun's energy. So they don't need direct sunlight to produce electricity and can still generate some energy on a cloudy day.

The Energy Savings Trust's website gives the following details:

• A 3.5kWp system can generate around 3,000 kilowatt hours of electricity a year – about three quarters of a typical household's electricity needs.
• It can save over a tonne of carbon dioxide every year.
• Home owners can get paid for the electricity they generate and use themselves under government feed in tariffs.
• Unused energy can be exported to the grid.

Want to work out how much you could save? If you have your Energy Performance Certificate for your property try the Trust's Solar Energy calculator to help you work out any potential savings.

Installation costs for home solar energy

An average 3.5kWp solar PV system costs around $7,600 (incl VAT) to install. However you plan to fund the project, either through applying for a loan or re-organising your finances, there are potential savings that might justify the cost of a new system over 10 years.

Home solar power – maintenance costs

Solar PV panels need to be kept clean, and not be overshadowed by trees. In the UK, panels are typically tilted at 15° or more and are designed to last over 25 years with maintenance costing around $1,000. Some buildings insurance policies will also cover solar panels so it's worth checking with your provider.

Why not make energy while the sun shines?

This Money Matters post aims to be informative and engaging. Though it may include tips and information, it does not constitute advice and should not be used as a basis for any financial decisions. MEGA FINANCE BANK accepts no responsibility for the opinions and views of external contributors and the content of external websites included within this post. Some links may take you to another MEGA FINANCE BANK page. All information in this post was correct at date of publication.