Are solar panels worth it? Yes says a renewables expert, but with some conditions

As electricity prices continue to rise, renewable energy continues to be an investment many homeowners are considering making. But, with solar panel costs adding a hefty chunk of money to your budget, we asked renewables energy expert David Hilton, 'are solar panels worth it?'

While his overall answer is yes, making sure they are depends on a number of different factors including the initial installation costs, whether you are able to access grants, the location of your solar panels, payback agreements and how you use your solar energy each day.

Read on to find out how to ensure when someone asks you 'are your solar panels worth it,' you are able to answer 'yes'.

Are solar panels worth it — why do we question the investment?

The popularity and adoption of solar photovoltaic (PV) panels escalated rapidly with the introduction of the very generous Feed in Tariff (FiT) in 2010. The FiT was so generous that the panels would pay for themselves in around 11 years from the generation income alone. Added to this was the fact the incentive was guaranteed for 25 years, and the homeowner could use the generated energy as well.

However, as soon as the FiT ended the sales of solar PV panels dropped off considerably. This was then replaced with the Smart Export Guarantee in 2020.

Even though the FiT had ended, installation costs did then fall meaning that as energy prices rose, and the cost of the installations dropped, the sales of solar PV picked up again. And, with the price of batteries dropping too, it was once again an option worth considering.

How installation costs and grants impact the payback period

Currently, when budgeting for solar panels costs, you will find that a solar PV system costs between £6000 and £9000 for a 4kW system and around £3000 plus for a reasonable solar battery.

However, although this sum may seem considerable, there may still be opportunities to get funding towards solar PV systems if you meet the eligibility criteria. This will help reduce your install costs and make the payback period shorter, resulting in your initial investment seeming more worthwhile.

Check with your local authority or the ECO4 scheme to see if you can obtain solar panel grants for installing solar PV on your home.

Make sure your panels are positioned for maximum energy gain

When looking at how do solar panels work, in short, the answer is they generate electricity from the light of the sun. There are no moving parts and the generation is 100% carbon free.

A south facing system on a roof with a pitch of around 35 degrees will give you the most optimisation in the UK. You can expect to yield around 4000kWh per year from a 4kWp kit, which is around 10 panels.

Further north the yield is only around 65% of that, while a west or east facing system also loses around 20% of the yield.

Understand what can be gained from selling on your energy

Energy companies are obligated to pay for solar PV excess generation but they are not told what to pay. Therefore, the amount of money you get paid ranges depending on which company you are with, and which tariff you are on.

That said, the highest payments are currently around 15p/kWh. Considering that electricity import costs around 25p it currently makes sense to try and use everything you generate, and then only export what you absolutely cannot use.

How can I maximise using my solar energy to get the best payback?

To maximise the payback from solar energy, you need to manage the energy use in the home and there are a number of ways in which you can do this.

1. Use appliances during the day: With the most energy generated during daylight hours, the key is to making sure you maximise on this. Any household appliances, such as washing machines, tumble dryers or dishwashers that can be scheduled to run during the daylight hours will mean you are using the solar energy and therefore adding to the payback. Cooking during daylight hours will achieve the same result.

2. Make sure you have a solar battery: If you have a battery then you need to make sure that it can also be charged at night so that if you are on an off-peak tariff such as economy 7, or an electric vehicle tariff for example, you can charge the battery at the cheap time and then use the stored electricity during the peak times.

3. Set your EV charger correctly: If you have an electric vehicle then make sure that the EV charger can also be set to be on standby so that the car can be plugged in but only charges when there is excess generation.

Are solar panels worth it on every home?

Solar panels are not a fad, they work and the payback of a PV system can still be around 8 to 11 years – even without accounting for any further electricity price rises. So as long as you can use the energy that you generate, then a PV system is a sound investment.

However, it's worth bearing in mind a few points that may or may not impact on your personal payback period.

To optimise the use of the energy you generate from your solar panels, you ideally need a full home. In a home with only one or two occupants it may be difficult to use all the energy you generate – particularly in summer, and therefore this makes it harder to effectively manage the return on your investment.

It also remains a tricky balance between winter and summer energy generation vs use. While you will generate an excess of electricity during the warmer months, even with a battery storing this excess, you may not get to use it all.

Why? Most solar batteries will be around 5kWh to 10kWh. However, in summer your PV system could generate around 30kWh in the day, so unless you are at home during the day using the energy as it's created, then your battery may not be able to capture all of the energy you don't use.

In winter however, you will use a lot more energy than you generate. This means you will still need a back-up system during the colder months, but does mean that you are able to fully utilise the power your solar panels provide.

FAQs

Do maintenance costs reduce the payback period?

Solar PV panels don’t need a lot of maintenance. They really only need to be cleaned, visually inspected for physical damage, and monitored.

If you notice a dramatic change in generation then the system needs to be checked. Wiring can get corroded or damaged if it comes loose and the inverter can also fail. My first inverter lasted 4 years, but the next one is still going strong after a further 10 years.

In order to start crunching numbers to see if solar panels are worth it for your home, start by looking at the suitability of your roof for solar panels and then work out how many solar panels you need. It's also worth finding out which are the main solar panel myths so you can start your research knowing the facts from the fiction.