These explanations will include how they work, the cost of installation and running, the benefits, the drawbacks, and how much money you could save on your energy bills by installing them.
First up is solar panels. Harnessing the power of the sun, solar panels have transformed the energy landscape and hold the key to a cleaner, more sustainable future. Solar panels are, without a doubt, one of the most common forms of renewable energy used by British homeowners.
How do they create electricity?
Solar panels are made up of a photovoltaic (PV) cell, a semiconductor device that converts sunlight directly into electricity. When sunlight strikes the PV cell, it excites electrons within the cell's material. This energy causes the electrons to flow, generating an electric current that can be harnessed for various applications.
Installation costs
A 4kW solar panel system, which typically consists of 10 panels and costs between £6,000 and £8,0001, is needed for the average UK home. A single 250w solar panel can range from £400 to £500 per panel2 due to factors like higher solar power output and efficiency. Therefore, the type of panel you choose will have an impact on your budget.
However, it's important to note that these costs are before any potential government incentives or subsidies, which can significantly reduce the upfront expense. You will also have to factor in labour costs if you aren’t capable of installing them yourself. Remember to do plenty of research into the tradespeople you hire to install them, to ensure you’re not paying above the odds and that you’ve hired a reputable company.
Government incentive schemes and initiatives
Due to the UK government’s goal of achieving Net Zero by 2050, there are a variety of government schemes and initiatives to incentivise the British public to make the switch to renewable energy on their properties. Here are a few examples:
Smart Export Guarantee (SEG)
The SEG is an incentive scheme in which energy suppliers pay homeowners for any surplus electricity they produce that gets exported into the National Grid. It came into place at the start of 2020, replacing the previous ‘Feed-in Tariff scheme’. Under SEG, you will have to apply directly to the suppliers offering SEG tariffs. You can find a list of these on the Ofgem website.
Zero VAT
The VAT (Value Added Tax) rate in the UK is 20% for the majority of goods and services. However, under government incentives, a lower VAT rate is available for a selection of energy-saving products and equipment, including the highest-quality solar panels.
It applies to the delivery and installation of solar panels on residential premises in England, Scotland, and Wales, and the reduced rate is now 0% until March 31, 2027.3
Solar Together
Solar Together is a group-buying scheme for solar PV panels and battery storage. It harnesses collective buying power to negotiate competitive prices from solar suppliers and installers. Participants receive personalised offers after a bidding process, enabling transparent pricing. The scheme aims to simplify and promote solar energy adoption, making it more accessible for homeowners and businesses.
Benefits of solar energy
There are a multitude of benefits to installing solar panels on your home:
Infinitely renewable
Solar panels rely on sunlight, an infinite and renewable resource. This reduces dependence on finite fossil fuels and contributes to a more sustainable energy grid.
Low operating costs
Once installed, solar panels have minimal maintenance requirements and can produce electricity for decades, leading to long-term cost savings.
Removes reliance on energy suppliers
Solar panels empower individuals, businesses, and even entire communities to generate their own electricity, reducing reliance on external energy sources and utility providers.
Better for the planet than fossil fuels
Solar energy production generates significantly fewer greenhouse gas emissions compared to traditional fossil fuel-based power generation, helping combat climate change.
Challenges of solar energy
While solar panels offer a multitude of benefits, challenges remain. These include initial installation costs, intermittent energy production due to weather conditions, and the environmental impact of manufacturing and disposal. However, ongoing advancements in technology, improved manufacturing processes, and increased government support for renewable energy are driving down costs and addressing these challenges.
Solar panels have unlocked a world of possibilities, from powering individual homes to contributing to large-scale energy grids. While challenges persist, ongoing advancements in technology and growing support for renewable energy solutions are propelling solar panels toward a brighter, greener future for generations to come.
References
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
Related Articles
Could you be spending less on your energy bills?
Improving an F or G rated property
What does retrofitting mean?
Download the Mortgage Advice Bureau app
Our app is a digital mortgage coach designed to help you save up, plan, and track your home buying journey – whether you’re buying your first home, or just fancy a move.
We’ll guide you through step by step to ensure you always know what’s coming up next.
