How solar panels could lower your energy bill

It costs around £6,500 for the average solar-panel system to be installed on a three-bedroom semi-detached house.

(Image credit: © Getty)

Shaving some money off rising energy bills by generating your own power is becoming ever more appealing – so much so that solar-panel installation firms are reporting a four-fold increase in orders this year compared with 2021. High installation costs have deterred households in recent years. But “[the] time it would take to recoup the cost of installing the panels from savings on energy bills is expected to get much shorter – from... 11 years at January 2022’s rates to fewer than four years from January next year,” says Ali Hussain in The Sunday Times.

It costs around £6,500 for the average solar-panel system to be installed on a three-bedroom semi-detached house, according to the Energy Saving Trust. Once your solar panels are up and running you can use your household appliances without it costing you a fortune as long as the sun is shining. The Energy Saving Trust says that the average household could save between £165 and £405 a year with solar panels.

You can also sell back the electricity you don’t use to the national grid, but unfortunately you won’t be able to charge anything close to what energy firms make you pay. The energy cap put a maximum price on electricity of 28.34p per kilowatt hour (kWh) but the most you can sell your electricity for is 12p per kWh. If you decide to install solar panels, you may want to switch energy provider. The amount they pay you for electricity varies massively, from a miserly 1.5p per kWh from EDF up to 12p per kWh from Octopus Energy.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Invest in a battery and you can store the electricity you generate rather than selling it back to the grid. You’ll pay around £2,000 for a 3kWh one, but once you have one it will help you save even more. Eon estimates that solar-panel households with batteries can use 30% more of the power they generate.

Surging demand means longer waiting times for installation, so keep this in mind when making any decisions. Also consider whether you have a suitable home. The ideal pre-requisite is a large, south-facing roof that is free from shade for most of the day

Also see:

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts 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.