How to make money by installing solar

Since the introduction of domestic solar panels on the high street in 2006 and the affordability of new generation PV (photo voltaic) panels, solar has become a viable energy option for UK homes. In 2010, Feed-in-Tariffs (FiT) were introduced which further strengthened the market for PV solar panels.

The benefits of solar panels are not only about disconnecting from the expensive and polluting national power supply however; there are many more advantages to having solar panels at home. What most people don’t realise, is that the UK is the one of Europe’s 5 biggest energy users, with nearly 60% of those fossil fuels being imported: coal from Russia, gas from Norway and uranium from Kazakhstan. Renewal energy from solar, wind, hydro and biofuel currently makes up 25% of the total energy supply and by installing solar panels, you can contribute to that number rising. source


Cost saving

When this technology was first introduced, the average domestic solar panel installation cost £11,000. Now the average cost is £6,500, which means that it’s never been to cheaper to buy and install a solar panel. This initial cost is offset through the added value to the home, and through the savings in electricity that families see each year.

According to the Energy Saving Trust, a typical household can expect to save £70 from an average 4kWp solar panel system. However, savings may be higher for families who live in Southern England where exposure to the sun’s rays, or insolation, is higher. Additionally, cheaper rates may be obtained from using the solar power during the day while it is reproduced.

Feed-in Tariffs (FiT)

In addition to saving on energy bills, you can also get paid for the electricity your solar panels produce. FiT’s were introduced by the government in 2010 in an effort to incentivise home owners to install solar. Those who apply to the scheme are paid a fixed amount for each kilowatt hour (kWh) that is being generated by their panels. How much money you receive will depend on the energy efficiency of your home, and the size and technology of your system.

With this scheme, the government provides positive monetary incentives to run an energy-efficient home and install better technology. Suppliers who joined the scheme before January 14, 2016, receive 12.03p/kWh. Those who applied afterwards are under the revised incentive scheme and receive 4.18p/kWh. This tariff currently has a lifetime of 20 years.

These savings apply regardless of whether the electricity is used. The payments are tax-exempt, and are paid out by the government quarterly. According to the Energy Saving Trust, the typical household earns £150/year with the feed-in tariffs.

The feed-in tariff is paid by the government while the electric company pays solar panel owners an export tariff. The export tariff also pays you an average of 4.91p for electricity that is not used, and sent back to the grid. The pay-off from this export tariff is typically half that of the feed-in tariff. When the saving from electricity and feed-in and export tariffs are accounted for, the average household saves £310 annually.

Energy Performance Certificates

To qualify for savings on electricity and the feed-in tariff, the supplier must have an energy efficient home with an EPC rating of band D or higher.

Every house in the UK that changes ownership or that is being rented out, must have a valid Energy Performance Certificate or EPC. This document has a significant influence on the price of the property. The EPC will basically give the new owners or tenants an indication of how cost-effective it is to run the relevant property. By installing solar panels, you can improve your home’s EPC rating by at least 2 grades, which could translate into an increased sale price of more than £16,000. source With an initial capital investment of around £6,500, this increase alone gives an ROI of 60%.

If your EPC does not make the grade, you will need to improve the property and have an additional inspection performed. Once a positive EPC grade has been achieved, the certificate is valid for 10 years.


Environmental responsibility

While there is money to be saved with solar technology, their environmental impact is also an important point to consider. Harvesting energy from the sun creates a low carbon footprint, which contributes greatly to the UK’s ambitious 2050 goal. In 2008, the UK passed the Climate Change Act, and pledged to reduce greenhouse gas emissions by at least 80%. Roughly a third of the UK’s emissions are due to domestic energy use. Therefore, investing in solar technology and other renewable energy sources is a smart way to help government reach its goal.

In 2015, year-on-year growth for solar energy exceeded 80%. It is expected that energy from renewable resources will make up 30% of the national energy supply by 2020, which will greatly contribute to the reduction of carbon emissions.

How does solar work exactly?

Every solar panel contains photovoltaic cells (PV), which convert sunlight into direct current (DC). The solar panel’s converter transforms the DC electricity into AC (alternating current electricity) which is then transferred to a battery where it is stored and from where it is consumed.

Solar and the rest of your home

It is very important to consider your home’s insulation when you have solar panels installed. The preserve the heat that has been supplied by your solar panels, you will need to ensure that the heat escaping through walls, the roof, floor and windows are kept to a minimum.


In the average home, around 50% of the energy used annually is contributed to heating. Since heat rises, the best place to start is the roof. It is estimated that more than 25% of all household heat escapes through the roof. The simplest and most cost-effective way to deal with this problem, is to lay mineral wool in perpendicular layers across the joists of unused roof space. Mineral wool can also be laid between the joists and insulated floor boards of the roof’s storage space. The process is so easy that a person with basic knowledge of construction and insulation can do it themselves. By insulating roof spaces, you can save between £200 and £240 annually on your heating costs.


Floors can be insulated with underfloor insulation material. Gaps in the floor should be closed with sealant, but the underfloor vents should be left open to allow the floor to breathe, and prevent rotting. Floor insulation typically results in annual savings between £65 and £95.


Windows are also a significant source of heat loss. An uninsulated window pane can cause a house to lose 3 times as much heat as it would from a wall. Triple glazing is the latest in window insulation technology. It uses triple layers of glass with Krypton gas between the layers, to keep heat from escaping your home. A triple glazing window unit comes custom-made in its frame to ensure it doesn’t allow air through. The frame is pocketed which further reduces heat-transference. Triple glazing is proven to reduce window heat loss by 50% when compared with double glazing, and can save families up to £100 per year in heating costs.

With the correct thermal insulation in place, the cost saving benefits of solar energy systems are very clear. Solar can become a supplementary system to your utility-supplied power, or you can choose to go off-grid completely with a comprehensive system and benefit from all the cost-savings and incentives. Whichever option you choose, solar panels are the green choice for both your pocket and the environment.

Published on : 23th November 2016

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