Thinking about investing in solar panels? Here’s what you need to consider

You’ll no doubt have seen a noticeable increase in the number of houses that boast solar panels in a street near you.

Solar panels were first installed in a UK home 30 years ago, on the Oxford Ecohouse. Designed by architect Susan Roaf in 1995, the six-bedroom family home is close by in North Oxford.

Now – 30 years later – more than 1.7 million homes have solar panels. And the South West of England is leading the way with 8.5% of homeowners going the renewable-energy route.

If your home doesn’t already have solar panels, the early summer sunshine may have sparked you to consider them.

So, here are a few key considerations to help you weigh up the true costs and savings of installing solar panels for your home.

Solar panels generate renewable electricity

Installing solar panels allows you to generate your own renewable electricity.

Solar panels can generate power on cloudy days and don’t need direct sunshine to work – though stronger sunshine will generate more electricity.

While solar panels are popular for potential cost-savings they present, the devil is in the detail.

According to The Eco Experts, a 3.5 kilowatt system for an average three-bedroom house will cost in the region of £7,000 and, depending on where you live, you could save up to £450 a year on your bills.

You can sell extra electricity back to the National Grid

If you generate more electricity than you use, the Smart Export Guarantee (SEG) allows you to sell any excess electricity back to the National Grid or an energy supplier.

The amount you could earn from selling unused electricity will vary depending on your provider. On average, you could expect to receive somewhere in the region of £120 to £180 each year.

To benefit from this arrangement, your solar panels must be professionally installed and certified through the Microgeneration Certification Scheme.

You’ll also need a smart meter that gives half-hourly readings – specifically, a SMETS 2 meter.

You shouldn’t have to fork out to maintain your solar energy system

Typically, solar panels needn’t require a lot of maintenance. And most systems come with a lengthy warranty between 20 to 25 years.

Although you’ll need to keep them relatively clean to keep powering your home effectively, once or twice a year should suffice.

Since there are no moving parts, there’s little wear and tear to worry about.

That said, you may find that you’ll need to change the inverter – the crucial part that converts solar panel energy to electricity that can be used in your home – after about 10 years.

A standard inverter will typically set you back between £500 and £1,000, depending on the type you need.

As well as this, you’ll also need to maintain the cables to ensure your solar power system runs at maximum efficiency.

Pros and cons in a nutshell

Double-check your home insurance

Solar panels will normally be covered by your home insurance as part of your home’s structure, but if you’re thinking of installing them for the first time, talk to your insurer before you commit.

As with any other major change you make to your home, you’ll need to tell your insurance provider before you attach solar panels to your roof. They may well increase the market value of your home, so it’s crucial that you ensure you have the right cover in place.

It may be that the amount of cover you have in place is enough to include your solar panels already, but don’t take this for granted.

When speaking with your insurer, make sure your policy would cover the cost should you need to repair or replace them.

It’s likely that installing solar panels will increase your premiums slightly – so be sure to factor this into your calculations before you place an order and work gets underway.

Take a long-term view

As with many investments, the ultimate cost-savings will be gained over the long term.

While solar panels could make your home a more attractive proposition to some buyers, you may not get a good return on your investment, especially if you end up selling within a few years of installation.

Get in touch

If you’d like to discuss how solar panels could benefit you and your long-term financial plan, we’re here to help.

Email info@logicfinancialservices.co.uk or check with your adviser.

 

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.