Solar panels Save £70 a year on leccy and /or earn £10,000s

Updated
28 Jun

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house Don't think solar panels are just about group hugs and saving the planet, they can save you serious hard cash.

If you can afford a typical £12,000 for your own system, a government scheme could pay you back double that over 25 years. If not, free solar panel systems could cut leccy bills by £70-ish a year. This guide shows the best routes and the top players.

The solar panel industry is still new and very fast-moving. Please feedback on how you find this info and if anything needs improving.

What are solar panels?

What are solar panels

You put solar panels on the roof to generate energy from the sun. There are two types of panel: solar photovoltaic (PV), which generate electricity and solar thermal, which heat water. This guide focuses on solar PV.

"Hang on, we don't live in California" may be your first thought. Yet solar panels don't need sunshine to work, just daylight, so you can still generate some electricity on gloomy days – important in a country with weather as dull as watching Steve Davis sleep.

PV roof tiles convert the light into electricity, which you can use to power your home during daylight hours. Any energy you don't use is pumped back to the grid. If you use more than the panels generate, the excess comes off the grid, exactly as it did before the panels were fitted.

In the winter, when solar power is less, you'll take more power from the grid. It's a good idea to set appliances to run while it's light outside, staggering them to max the savings. For tons more top tips from solar nerds, read the forum's Make the most of solar panels thread.

What's in it for you?

First get away from the idea that this is purely about going green – done right, solar panels can generate £1,000s in cash savings. You save in two ways:

  • Electricity bill savings. The Energy Saving Trust (EST) estimates that a typical family can knock around £70-ish/year off their bills with a typical 2.7 kWp system, depending on system size, location, whether you're at home during the day and other factors.

    EST used to predict higher electricity savings of £120. Yet its recent research found, while solar panels can produce 50% of a home's electricity, most of this electricity gets pumped back to the grid. Over five to 25 years energy prices are predicted to rise significantly; if so, you'll save more.
  • Feed-in tariff payments. Back in 2010 the Government ditched grants for solar panels and replaced them with a generous scheme that pays for all the solar energy you produce, even if you use it yourself. The amount you earn depends on your system's size, but a typical payment could be £1,030/year (do your sums first).

    Bizarrely, the earnings from this scheme massively eclipse the electricity bill savings.

Should you pay or get 'em free?

When it comes to installing, you've two options: get solar panels fitted for nowt or, if you can stump up a typical £12,000, buy your own system and get payments from a government scheme.

Solar panels: who gets what?

FREE systems: Pros & Cons

  • Free electricity. You could typically slice your electricity bill by £70-ish/year – more if you're at home during daylight hours or prices jump significantly, which they could well do over 25 years.
  • Try free then buy. One solar panel scheme, E.on, allows you to buy the solar panels at a reasonable price later on, meaning you could decide later to pump in the cash and keep the feed-in payments.
  • Make your home greener. Free solar panels let you make a contribution to reducing your home's carbon footprint, without stumping up your own cash. But not everyone's convinced about solar panels' benefits see George Monbiot's Guardian blog.
  • Free maintenance. Usually the free solar panel company maintains the panels and pays for insurance (always check your contract).
  • They keep the feed-in tariff

    The free solar panel company keeps the feed-in tariff, typically £1,030-ish year. If you've spare cash, you may be better off paying for your own system. Yet if you don't have spare cash for panels, you wouldn't been able to get this anyway.
  • Buyout fees

    This is best for those settled in their forever home. While some providers have reasonable buyout fees, with others, it's cheaper to buy out Lionel Messi.
  • Potential buyers may be wary

    Do bear in mind a leased roof could ring alarm bells for prospective buyers. Richard Webster of Richard Webster & Co Solicitors says: "I can't see any real problems for the average buyer with the free panels scheme, other than the look of the house, if that's a concern.

    "Most people will appreciate even a small saving on electricity costs. Of course, there is always the chance that some buyers may worry; being tied to some third party in a contractual situation, however harmless, could frighten some."
  • Roof repairs could be costly

    Free solar panel companies usually fix your roof if it's damaged by the panels. But if you want to fix your roof for a reason not connected to solar panels, free solar panel companies sometimes make you cover their feed-in payments in the meantime (always check).

Buying your own system: Pros & Cons

  • You keep the feed-in payments. As an example, a £12,000 system could net you £25,750 over 25 years, though it totally depends on system size, location, sunshine etc.
  • You save on electricity. On top of this, you could typically slice your electricity bill by £70/year – more if prices rise.
  • It could tempt would-be buyers. Buyers may be attracted by the electricity savings and feed-in payments. Though others may be put off by the look of the things, so do ask local estate agents for their experiences.
  • The Government could end/change it early. The Government says the feed-in scheme will run for 25 years, but it can do anything it wants. There's nothing to stop future governments ditching it – the Government can say it owns France if it wants to.

    The truth is retrospective legislation is very rare, and few parties ever support it. Most likely they'll change the scheme for new subscribers only, but anything's possible.
  • You will have to pay for upkeep. The Energy Savings Trust says little maintenance is required on a properly installed, well designed solar PV system, though you'll likely need to replace the inverter within 25 years (c. £1,000). Of course, though, anything could go wrong.

    You also need to check your home insurance covers the system and add it if not.

Route 1. Buy your own panels

Solar option oneIf you've £8,000 to £14,000 knocking about, you could get back more than double that in payments for the energy you produce. Some firms will also let you buy solar panels on credit. However, if you don't have the cash up front, panels aren't for you. The interest on the loan could dwarf the savings.

This is all about the Government's feed-in tariff (Fit) scheme, which means electricity companies must pay people who produce electricity from renewable energy sources such as wind or the sun.

The Energy Savings Trust (EST) says a typical £12,000 2.7 kWp (kilowatts peak, the rate it generates electricity on a sunny day) system could earn £1,030/year in payments. It's not guaranteed and depends on system size, location etc. Yet the key to this is:

A typical system could cost c.£12,000, but over 25 years the feed-in payments could net you £25,750.

The Government says the feed-in tariff payment for solar panels will run for 25 years and will rise with inflation (linked to the Retail Price Index). It's also tax-free.

EST predicts feed-in tariffs are "likely to be significantly reduced for systems installed after 1 April 2012". So if the sums do add up for you, you may want to act quickly.

Route 2. Get 'em free

If you're in England, Wales or, in a few cases, Scotland, panel firms will fit a state-of-the-art system to your home for free, possibly cutting your leccy bill by £70 a year.

Why do they do this?

Normally the homeowner grabs the big-money feed-in cash, but, in return for the free solar panels, they keep this. So you get cheaper leccy bills, they get the payments.

The £1,000s in feed-in payments dwarf the electricity savings, so if you do have the cash, consider buying the panels outright.

Watch to watch out for with free solar panels

This is a relatively new industry. Your home is your most valuable asset, so think very carefully about what it means to sign up for a 25-year commitment. Don't read this as a 'don't do it', instead a 'be prepared that if you do, it may not be plain sailing'. Read these points to bear in mind

The free solar panel companies

Here's a comparison of the UK's biggest free solar panel companies. What happens will also depend what's in your contact, so do read carefully before signing, preferably seeking legal advice.

The solar panel companies say that the buyout fees they gave us are fixed, although, of course, they vary according to system size. Yet always ask it to include a schedule of these fees in your contact, and confirm the charges will not rise.

This is a relatively new scheme, so while we have info from the providers, what we don't have is much feedback from MoneySavers who've been through it. Please add your feedback to the companies' threads if you sign up.

E.on Strong pick, as effectively 'try free then buy'

  • Where: England and Wales
  • Typical buyout fee (yr 13): £7,806
  • Roof requirements: E.on customers with south-facing roofs of 23m2 plus
  • Lease length: 25 years
  • Feedback: E.on

E.on's a strong contender, as it's a big company, so far from a fly-by-night player. Plus it lets you try then buy, as you can sign up for £99 panels, then pay a reasonable sum later to buy them and start earning the feed-in tariff.

The only drawback is you must be an E.on customer to sign up, but with a transaction this big, the chance of solar gains likely outweigh any possible extra pounds on energy (you can always switch away once done).

British GasYou don't need to be with BG & includes Scotland

  • Where: England, Scotland and Wales
  • Typical buyout fee (yr 13): £14,500
  • Roof requirements: Pitched, un-shaded roof, facing south east to south west
  • Lease length: 25 years
  • Feedback: British Gas

It's an established player in the industry, and you don't need to be a British Gas customer. The downside's it charges more than E.on to take over the panels.

A Shade GreenerGood for northerners

  • Where: Parts of northern England & the Midlands
  • Typical buyout fee (yr 13): You can't buy out
  • Roof requirements: Roof must usually be 24m2 & due south or within 70 degrees of south
  • Lease length: 25 years
  • Feedback: A Shade Greener

A Shade Greener concentrates on the North of England and has decent feedback from forumites, though you can't buy the panels out.

EvoEnergyStrong feedback for installing (new to free systems)

  • Where: South of Northampton
  • Typical buyout fee (yr 13): £12,820
  • Roof requirements: Roof of 23m2, facing south east to south west, no shading
  • Lease length: 25 years
  • Feedback: EvoEnergy

Though new to the freebie panel market, EvoEnergy is an established solar panel fitter.

HomeSun

  • Where: Everywhere south of Hull including Wales
  • Typical buyout fee (yr 13): £15,000
  • Roof requirements : 20m2 of clear, unshaded space and the roof can't be too flat or steep
  • Lease length: 25 years
  • Feedback: HomeSun

HomeSun is an established free solar installer, but its buyout charges are on the high side.

ISIS Solar

  • Lease length? 26 years
  • Typical buyout fee (yr 13): £15,700
  • Roof requirements: Pitched, unshaded roof of 25m2 or more
  • Areas covered? All England and Wales
  • Feedback: Isis

Isis installs in England and Wales and gives £100 M&S; to new recruits.

How much to buy out a 3.15kw system?
Provider
Year 6
Year 13
Year 19
E.on
£12,172
£7,806
£4,278
British Gas
£15,000
£14,500
£9,500
EvoEnergy
£15,246
£12,820
£10,048
HomeSun
£18,000
£15,000
£10,000
Isis
£17,861
£15,713
£10,527
A Shade Greener (1)
N/A
N/A
N/A
Based on a 3.15kw system and for, British Gas, a 3.22kWp, but prices vary according to size. Prices include inflation. Always ask for a list of buyout fees. 1) You cannot buy out

Solar panels: key warnings

There are some important checks to do before you buy panels or sign up for freebies ...

  • Check if you need planning permission
    Planning permission
    You don't generally need planning permission for solar systems. The big exceptions are if you've a flat roof, the property is listed, or it's a conservation area.

    You might need to get approval from your council's building control team though. Check with your local authority. If you get a free system, your provider will normally do this for you (always check).
  • Tell your mortgage provider and insurer

    As with any home improvement, you should contact your insurer and mortgage provider. If you go for the free option, check that the company will liaise with lenders and insurers.
  • What if the solar company went bust?

    If the free solar panel firm went bust, it's likely the panels would stay on and be maintained. The rights to collect your feed-in tariff would be creditors' biggest asset, so chances are they'd sell this right on to another company.

    Yet this is a totally new business model, and things could change if the Government withdrew the feed-in scheme, so it's impossible to predict all eventualities.

    If you bought solar panels and the fitter went bust, you would need to find someone else to maintain them, yet this wouldn't be so much of an issue.

  • Converting your loft could be tricky

    If you're planning to convert your loft, ask the installer if you'll still be able to. For example, sometimes inverter equipment is stored in the loft, meaning less space.

Here's a list of other commonly asked questions:

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Home wind turbines

Home wind turbine

For those in uber-blustery locations, wind turbines are another option. They're suitable for fewer people than solar panels, but if you do have the right wind speed, the potential savings could blow you away.

The turbines work in windy, exposed locations, not too close to buildings. It sounds like something that diagnoses flatulence problems, but the Energy Saving Trust's wind speed tool tells you if your area has the required 5 metres per second.

Unlike solar panels, you nearly always need to get planning permission and they sometimes make a noise. Do be aware there is debate over how effective wind turbines on urban homes are - most people who install wind turbines have land and aren't too close to neighbours.

How much can you save?

Wind turbines are pricier than solar panels: you're looking at between £15,000 and £23,000 – sometimes even up to £50,000 for the bigger models.

Savings vary greatly depending on the wind speed and the size of your system but could be up to £300 a year.

As with solar panels, for every watt you generate you are paid a guaranteed sum – on smaller systems this adds up to 36.2p per kWh generated. For bigger wind turbines systems it's 28p per kWh generated. You then get an extra 3.1p for every kWh you export back to the grid, on top of money given for generation. See a full list of tariffs.

Both your installer and wind turbine must be registered with the Microgeneration Certification Scheme (MCS) to get the feed-in tariff.

Again, how much you can make varies dramatically according to wind speed and turbine size. In the right location you can earn between £500 and £10,000 a year. Use the Energy Savings Trust's cashback calculator to check how much feed-in you could get.Wind Turbine

Can you get free wind turbines?

There aren't any residential free wind turbine schemes as yet. One company, SolarVentus, runs a scheme, but it's aimed at landowners, farmers and industrial users rather than domestic properties.

We've heard there could be one in the pipeline though - all updates will go in the free weekly email.

Anything else to watch out for?

To grab the feed-in payments, you will need to be connected to the national grid. Your installer will be able to work out whether the site is suitable and where the cables will go.

The turbines have moving parts and will need maintenance. Do check with your installer how the warranty works and who's responsible for getting them fixed.

This is a serious undertaking and a big expense. Before installation do your research and treble check wind speeds.

Crucial tips to save £100s on energy bills

Obviously there's absolutely no point at all in installing a swanky solar panel system if you haven't tried other ways to save first. Here are our top tips:

  • Switch energy

    Save money on gas & electricitySwitching energy is easy: nothing changes other than who bills you. If you've never switched before you can save £200+/year. While the cheapest online deals for typical users are around £900 a year, those on a standard tariff typically pay around £1,150.

    For full info on the top comparison sites and how to get extra cashback, a crate of wine or Amazon vouchers see the full Cheap Gas & Elec guide.

  • Pay by monthly direct debit

    Set up a monthly direct debit to pay your bill and you'll usually save around 5-10% extra yet it's crucial to make sure the energy company doesn't set it too low or too high. Either the supplier keeps hold of your cash unnecessarily or you end up with a big bill at the end of the year. Full details in the Energy Direct Debits guide.

  • Do a meter reading regularly

    Every time you receive a bill, do a meter reading. Don't rely on your energy provider's estimate; these are often way out. If they're under-billing, you'll have a big whack to pay at the end of the year. If they're over-billing, then they've unfairly got your cash.

    If your Direct Debit is way off kilter, call up and request it's changed. You have a range of rights to ensure it's correct. See the full Energy Direct Debits guide for template letters to help.

  • Switch to an internet tariff

    Switch to your company's internet billing. It will usually save you up to 10% over the standard tariff, and all it really means is you get your bills emailed.

  • Grab £1,000s of grants

    There's a vast range of grants available for improving home heating and insulation. Just go to the Energy Saving Trust's Energy grant search. For more grants available for all types of home improvement, see the full Grant Grabbing guide.


The solar panel industry is still new and very fast-moving. Please feedback on how you find this info and if anything needs improving.

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