There’s a growing trend across the UK, where solar panels are increasingly seen as a smart choice for energy-saving and environmental benefits, especially in the wake of rising energy costs spurred by global events. The FT looked into the financial pros and cons of solar – here’s our summary.
The push towards solar energy has been further accelerated by the energy crisis following geopolitical tensions in Ukraine, prompting many households to seek alternatives like solar panels, insulation, and double glazing to mitigate soaring energy bills.
In 2023, the UK saw an impressive one-third increase in solar installations from the previous year, with 183,000 new setups, according to MCS, a renewable energy certification scheme. This surge reflects the enhanced efficiency of solar panels and the complementary role of large batteries in storing and managing energy.
Investing in Solar
The journey to solar energy is not without its considerations. Factors such as energy consumption, geographic location, installation quality, and political climate play crucial roles in determining the viability and success of solar investments.
A typical 3.5kWp solar system, covering around 20 square meters, costs about £7,000, including installation, and is expected to last 25 years. However, maintenance and cleaning may incur additional costs. The efficiency of solar panels has significantly improved, with current models achieving an average rate of 15 to 21 percent, making them a compelling option for a wide range of homes.
Financial Incentives and Savings
The financial landscape for solar energy in the UK has evolved from generous government subsidies under the Feed-in Tariff (FiT) scheme to the more market-driven Smart Export Guarantee (SEG), which allows homeowners to sell excess energy back to the grid. Despite the end of the FiT, solar energy production continues to grow, demonstrating the sector’s resilience and potential for savings, especially with the integration of solar batteries and smart tariffs.
However, the market is not without its challenges, including the prevalence of “cowboy” installation companies that exploit consumers with false promises and subpar services. The experience of Bruce Chisholm, who faced delays and additional costs due to unreliable installers, underscores the importance of vetting companies and ensuring MCS certification.
The Path to Payback
Despite these hurdles, the payback period for solar installations is becoming increasingly attractive. For instance, Scott McKelvie’s investment in solar panels and a battery is expected to pay off in under five years, thanks to significant savings on energy bills. This demonstrates the financial viability of solar power, especially when coupled with strategic energy use and additional features like electric vehicles.
Solar Energy Beyond the Individual
Solar power is not just for homeowners with the ideal roof or location. Innovative schemes like Ripple Energy’s co-operative model allow individuals to invest in solar and wind projects collectively, offering a new avenue for energy savings and environmental contribution, regardless of personal living situations.
The Future of Solar in the UK
While the solar industry faces challenges, including political uncertainties and the reliance on foreign panel imports, the sector remains vibrant and innovative. The continuous improvement in technology and cost-efficiency, along with community and government initiatives, suggests a bright future for solar energy in the UK.
Homeowners interested in solar panels should consider their energy needs, potential savings, and the environmental impact, alongside conducting thorough research and seeking reputable installers. With the right approach, solar energy can be a rewarding investment for both the wallet and the planet.