Electric Bill Savings with Solar Panels

Electric Bill Savings with Solar Panels

According to research by the Energy Savings Trust, the average UK home can save £130 per year on their electricity bill by installing solar panels. The highest average savings are £150 in Northern Ireland and lowest are in Stirling, Scotland at £110 per year. These savings are based on a system size of 4kWp.

The size of the solar panel system you install impacts the savings you can make on your electricity bills. The larger the system, the more electricity your system will generate and that’s more electricity for you to either use or sell back to the National Grid. Whilst larger solar panel systems can be more expensive to install initially, they are generally more cost effective as the benefits from the feed-in-tariff and savings on electricity bills far outweigh the initial investment.

Some of our solar panel installers have reported that customers for whom they have already fitted solar panels are making significantly higher savings on their electricity bills that the estimate given by the Energy Saving Trust. They estimate that home owners use around 25% of the electricity generated by their solar panels – however solar panel installers are claiming that figure is around 37% and in some cases as high as 50%.

Earnings from Solar Panels with Feed In Tariff

Solar PV installed by any of our MCS accredited installers are eligible for the Feed In Tariff. Your home must also have an energy efficiency rating of D or above. An Energy Performance Certificate grades the energy performance of your home. Having cavity wall insulation, solid wall insulation, loft insulation or double glazing – all contribute to an improved energy efficiency rating.

Once registered for the Feed In Tariff (our trusted solar installers will explain the registration process), you’ll be paid for excess electricity that your system generates. The Feed In Tariff is made up of the Generation Tariff which is a fixed rate which is determined at the time of registration onto the Feed In Tariff Scheme, and the Export Tariff which is paid based on electricity units that are not used by your property, but instead exported back to the National Grid.

The Generation Tariff part of the Feed In Tariff is guaranteed for 20 years and is Retail Price Index linked. The rate of payment is reviewed every 3 months by the Government, but once registered on the scheme, the rate is guaranteed for up to 20 years.  For the period 1st July 2015 to 30th September 2015, new solar panel systems registered on the scheme typically make the average homeowner £653 per year in tax free earnings based on the current feed in tariff rate. You can get a very accurate assessment of your earnings from solar panels by using the solar calculator. As mentioned earlier, solar earnings do rise in line with inflation.

Because the Government has cut the Feed In Tariff and these cuts look likely to continue, the earning potential from solar panels is reducing. However, this is balanced by the drastic decrease in installation cost.  However by getting solar panel comparison quotes, you can save even more money on installation just by shopping around – in the same way you would when you would get at least 3 quotes for other types of home improvement.

The current Feed In Tariff rate for installations after July 1st 2015 but before October 1st 2015 on a 4kW or less system to a new build or occupied property is as follows:

Higher Rate: 12.92p per kWh

Middle Rate: 11.63p per kWh

Lower Rate: 5.94p per kWh

The higher rate is achieved when your EPC is a band D or above – which we recommend you achieve in order to maximise your profit from solar panels.

Energy Minister Greg Barker has said that those approaching retirement should consider investing some of their pension cash in solar panels. Due to the fact that solar panels deliver a financial return of between 5% and 8% per year, this beats the return provided by pension annuities.