Why free solar panels are best avoided

Solar panels can save you money on your energy costs, but they are expensive to buy and fit. However, one company is offering to supply, install and maintain them for nothing. But it's not as good a deal as it seems. Ruth Jackson explains why, and suggests three alternative ways to cut your energy bills.

Solar panels have always been expensive. As a result, only a small number of people have decided that the potential energy savings are worth the initial cost of buying and installing them. Isis Solar is hoping to change that. Last month it hit the headlines by announcing that it is to start handing out the panels for free saving you the £11,000-£15,000 the average PV solar panel system costs to install. And that's not all: Isis will fit and maintain them for 25 years, too. All you need to qualify for this fabulous-sounding deal is 24sqm of south-facing, completely unshaded roof space.

What's the catch?

Obviously, Isis Solar isn't doing this out of the goodness of its heart. So what's in it for them? Feed-in tariffs. Back in April a new scheme was launched whereby the government, via the utility companies, pays cash to anyone generating energy from a small-scale renewable schemes at a set level for a long period (25 years in the case of solar, read more on this here: Will solar panels pay for themselves? It's no small amount of cash either it can add up to between £900 and £1,450 per year. But go with Isis and you won't get it Isis will. And that isn't particularly financially efficient for you.

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If you install the panels yourself, you'll get the Fits for yourself as well as the reduced energy bills: note that, nuts as it may sound to the average tax payer, you get paid for all the electricity you produce even if you use it yourself. It may cost you a bit up front, but the cash from the government means you should have earned back the cost of the solar panels within ten years, says Miles Brignall in The Guardian. Banks are also beginning to get wind of this and some say they may be prepared to lend money towards installation. That might be worth looking into.

You may still think that the Isis deal is a good one. After all,you do get a reduced bill, and without any upfront costs. That may be so, but before you sign up, be prepared for some disappointments. PV solar panels can create electricity from daylight rather than sunlight, so even on an overcast day they should produce something. But the problem is electricity produced this way cannot be stored, so if you don't use it immediately it will be fed back in to the national grid. This means that only the electricity you use during daylight hours will be part-provided by your panels. The rest of your electricity will still come from your energy provider, and you'll have to pay for it. So unless you are home a lot during the day, you won't see a huge reduction in your bills.

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Finally, if you do meet the criteria (not all of us will 24sqm suggests a pretty big roof) and get the solar panels, note that in doing so you will committing to keeping them on your house for 25 years, and allowing Isis access to your property to maintain them throughout that time. What happens if you sell? You might find buyers who appreciate the lower bills, but you might find as many who think panels look awful and would prefer to pay their full bills than to have Isis maintenance men crawling around on their roof. Estate agents report that the response from prospective buyers can be mixed, with some appreciating the green credentials and reduced bills, but others insisting the panels are too 'unsightly' to live with.

Three ways to cut your energy bills

All in all, going with Isis seems to be a pretty big commitment to make in order to shave around £120 a year off your electricity bill. There are much simpler ways to both cut your bills and be more eco-friendly, if that's what you want.

Switch supplier

If you've never switched energy supplier you could save yourself around £400 a year. Even if you have switched, if it was a couple of years ago you could reduce your annual bill by £100-plus if you switch again.

Insulate your roof

Most of us don't have enough insulation in our lofts. The recommended thickness of loft insulation is 27cm, but the average house has a mere 7.5cm. Insulate your roof properly and you could save around £150 a year.

Get an Owl

The OWL wireless energy monitor attaches to your electricity supply then tells you exactly how much electricity you are using and what it is costing you at any given time. Get one of these and you'll quickly learn to turn things off and use energy guzzlers less. So much so that you can shave up to 25% off your electricity bill, says The Sunday Telegraph.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings and credit cards to pensions, property and pet insurance. 

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping among many other titles both online and offline.