Britain’s largest energy company has seen a 50% rise in sales of solar panels as the war in Iran pushes up oil and gas prices, leading to fears that energy bills will spike when Ofgem sets its next price cap.
The head of Octopus Energy, Greg Jackson, told the BBC there has been a “huge jolt” in interest in solar panels as an alternative source of electricity.
Meanwhile, the government is in talks to relax current restrictions that ban the sale of plug-in solar panels, meaning they could be available in shops “within months”.
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How much do solar panels cost?
Traditional solar panels, which allow you to generate your own energy and reduce your carbon footprint, cost an average of £6,100. This “hefty” up-front price tag means it generally takes at least 10 years to break even, said Money Saving Expert.
There are “various financing options” available, including subscription services, where a household might pay around £95 per month over a period of 20 years, although the interest payments mean this would “cost you more in the long term”, said The i Paper.
A solar battery, which can store excess power generated by your solar panels that you don't use at the time, would add around £4,500 to the set-up costs, although that would similarly be offset by the additional electricity. Batteries have been the “biggest game-changer in solar power”, said The Times. People used to miss out on free electricity if they were not at home while the sun was shining, but now a battery can store energy generated during the day for use in the evenings.
The next big game-changer could be plug-in solar panels. If plans to permit them to be connected to domestic sockets go ahead, they will retail for a single up-front cost of around £400. Typically smaller than traditional panels, they can be then placed in sun-exposed areas like gardens and balconies, or on external walls.
Are they suitable for all homes?
Some more than others. North-facing roofs get very little direct sunlight, so they won’t be so efficient. South-facing roofs are ideal, and west or east facing surfaces can work fairly well. If your house is shaded by trees or other buildings between 10am and 4pm the benefits will be reduced. Large roofs are better as a solar panel typically measures two square metres.
Where you live makes a difference, too. The further south, the greater the potential savings, as southern homes generally enjoy slightly more daylight than those in the north.
It takes roughly a decade to recoup your installation costs so if you’re considering moving in the next few years, you won’t reap the full benefit yourself. Solar panels could increase the market value of your home, although experts are divided on how much: trade body Solar Energy UK estimates a boost of up to 2%, but according to The Eco Experts it could be as much as 14%.
Finally, if your property is listed or is in a conservation area you might need to get approval from your council’s building control team.
How much could you save?
Savings will depend on a number of factors, including system size and how much electricity you use. But according to Energy Saving Trust estimates, a typical household could save between £190 and £350 a year at current Energy Price Cap rates.
You can also save money by getting paid to export unused electricity you generate back to the National Grid, through the Smart Export Guarantee. Exact earnings will depend on how much unused electricity you are able to provide, and tariffs vary between providers.
Smaller and cheaper plug-in panels “could cut around £100 off household bills each year”, said The i Paper, meaning that the purchase price “could be covered within about four years by the savings they generate, with any additional electricity they produce being effectively free”.
Britain’s domestic energy prices are the second highest in Europe. Since 2020, the price per unit of electricity, which is measured in kilowatt hours (kWh), has risen from about 17p to 27p. Over the same period, the price per watt of panels has dropped by around 40% and the price of batteries fell by around 50%.