Energy News

Solar panels don’t save much money

By Martin Fagan - news@consumerchoices.co.uk

The savings from installing solar panels are a pitiful £70 a year, according to a new report from Energy Saving Trust.

A new report has called into question the amount of electricity households would save by installing solar panels, slashing savings estimates to £70 a year.

Following an undercover investigation by consumer group Which? that found three quarters of salespeople mislead customers over the potential savings they would make by installing solar panels, the Energy Saving Trust (EST) looked again at how much the panels could save consumers.

The EST had estimated 50% of the energy produced by solar panels is used in the home. It now says the figure is more like 25% and has revised the annual savings offered by installing solar panels from £120 a year to £70.

However, the EST points out the £70 per year reduction is applicable to current electricity bills and, as electricity prices rise, so will the savings.

Also, households installing solar panels will not only benefit from lower electricity bills, but could earn money by selling any unused electricity the panels generate back to the National Grid.

Homeowners are paid a Generation Tariff of 43.3p per kilowatt hour (kWh) and an extra Export Tariff of 3.1p on top of that for every unit of unused energy that goes back on to the grid.

As an example, the Energy Saving Trust estimates that a typical domestic solar electricity system, with an installation size of 2.7 kWp, could earn around £990 per year from the Generation Tariff, £40 per year from the Export Tariff plus the additional £70 per year reduction in current electricity bills. This would give a total saving of around £1,110 per year.

Installing solar panels can cost between £7,000 and £16,000 depending on the quality of the units and ease of installation on a house’s roof.

“A coherent strategy on how to encourage consumers to take-up energy efficiency measures is essential,” said Audrey Gallacher, director of energy at Consumer Focus.

“But equal priority must be given to consumer protection. Consumers must have confidence that providers are trustworthy and that help is easily available if something goes wrong.”

However, for households seeking to burnish their green credentials but unable to afford the outlay for solar panels, E.ON energy is offering a deal where it will install solar panels for £99 under its SolarExchange deal.

Under the scheme, E.ON will receive the income from the Generation and Export tariffs from selling the energy back to the grid, while the homeowner would benefit from reduced energy bills.

Households have to be existing E.ON customers, must own their house and must have a south-facing roof of 23 square meters.

For those households who prefer to save on energy bills by more conventional means, E.ON has launched two new discounted tariffs: E.ON SaveOnline 8 and E.ON Track and Save 10.