Solar Panels - To have or not to have!

Solar panel need-to-knows

"Solar power? Hang on, we don't live in California!" Yet it's all about daylight, not sunshine, so panels can still generate some electricity on gloomy days - vital when the weather's as dull as watching Steve Davis watching paint dry.
Yet before you stick them on your home, understand these key need-to-knows.

1. Want solar panels? How to install
   Install solar panels and you get paid a 'feed-in tariff' for the energy produced, even if you use it yourself. The tariff you get depends on when your panels are fully installed and registered. Once you've done that, your rate's guaranteed for 20 years.
   
   Full feed-in cuts info

   The amount depends on your system's size, but the Energy Saving Trust estimates a typical payment of £630 a year under the current feed-in tariff, rising with inflation. It was £650 but this dropped to £630 on Tue 1 Apr. If you registered the panels before 1 April this year, you'll still get the higher feed-in tariff.
   The feed-in tariff covers England, Scotland and Wales, but not Northern Ireland. (See Buy solar panels for full analysis on if it's right for you.)
   
   Here's how the installment process works...
   
   • Step 1: Find an installer.
     Call local installers to get the best price. Both the system and the installer should be members of the Microgeneration Certification Scheme (MCS). Get at least three quotes before deciding.
   • Step 2: Get them installed.
     Installation typically takes one or two days, roughly two to four weeks after booking, depending on the installer.
   • Step 3: Register for feed-in payments.
     Once panels are in, the installer will send you an MCS certificate. You then register for feed-in payments with your energy supplier to get the current feed-in payments.
     Send a completed application form with the MCS certificate, Energy Performance certificate, proof of purchase and ID. Sometimes you can ask your installer to email these documents to you, so you can forward them to the supplier. They can also be sent by post.
     Call your supplier to check it's got the application. Write down the date, time and who you spoke to.
2. You need a south-facing roof
   You usually need a roof that faces roughly within 45 degrees of south, with no shade from other buildings or trees. While some early or late shading is okay, the roof should be unshaded between 10am and 4pm. If your roof doesn't fit this criteria, you may not be able to get maximum payments with solar panels.
3. You save on electricity bills
   The Energy Saving Trust estimates a typical 4kWp system can knock £130 off a family's bills each year (this is based on typical usage and will vary depending on how much time is spent at home). Electricity prices are predicted to rise massively over the next 20 years, which means the amount you'd save would as well.
   The savings depend on the system size, electricity use, whether you're at home during the day and other factors.
4. Panel prices have dropped
   The Government may have slashed payments for generating electricity, but the price of a typical (4kWp) solar panel system, including installation, has dropped to about £7,000 (£6,000-£6,500 in some cases). A system this size used to cost £10,000 to £12,000.
   So while the feed-in's less each year, getting panels has become cheaper. See our full analysis - should I buy solar panels?
5. You may be able to get solar panels free
   If you live in certain parts of England and have a suitable roof, a company may offer to fit panels free. In return, it keeps the feed-in tariff cash. You just get the £130ish electricity savings (though energy prices are predicted to rise).
   It's tough to meet the eligibility creteria, though, and these deals are getting rarer now the feed-in tariff is being cut. To check if it's right for you and what to watch out for, see Free panels.

Quick questions

How exactly do solar panels work?

You put solar panels on the roof to generate energy from the sun. There are actually two types of panels. Thermal panels just heat water, while photovoltaic (PV) panels, which generate electricity, have sparked all the fuss.
The panels convert the light into electricity, which you can use to power your home during daylight hours. Any energy you don't use is pumped back to the grid. If you use more than the panels generate, the excess comes off the grid, exactly as it did before the panels were fitted.
In the winter, when solar power is less, you'll take more power from the grid. It's a good idea to set appliances to run while it's light outside, staggering them to max the savings. For tons more top tips from solar nerds, read the forum's Make the most of solar panels thread.

Do I need to live in a sunny area?

It's not essential. Remember, this is about daylight, not hours of sunshine. But you do need a roof that faces roughly within 45 degrees of south, with no shade from buildings or trees.
Of course, northern homes get slightly less sun, yet solar panels are still worth it in most areas. Ideally, you'd also be planning to stay in your house for a number of years.

You also need a grade D Energy Performance Certificate or above to qualify for full payments

Who pays the feed-in tariff and how often?

Your energy supplier will normally make the feed-in payments to you every three months, either straight into your account, by cheque, or transferred as a credit to your electricity account.
You normally have to provide meter readings, by phone or online, to your supplier every three months to get the payments.
This is not like a normal meter reading. Every solar PV system comes with a generation meter, which measures the amount of electricity you generate. You take a reading from this and give it to your feed-in tariff provider every three months. Beware, a previous Which? survey has exposed payment delays among some suppliers.
Strangely enough, some get feed-in payments from a different company to their current supplier. For example, E.on manages some feed-in payments for other suppliers' customers. See below for full info on how much you can earn via the feed-in payments.

Should you buy solar panels?

If you've £7,000+ knocking about, you could get some of this back in electricity savings and feed-in payments for the energy you produce.
The key to all this is that with the current feed-in tariff:

A typical system costs £7,000, but over 20 years, the feed-in payments and electricity savings could add up to roughly £16,000.

Solar panels used to be a no-brainer. When the Government launched the feed-in scheme, people typically got a gobsmacking £1,100+ per year in payments. The cash was guaranteed for 25 years, so that was at least £27,500 back - not taking into account electricity savings.
The Government slashed these payments so now £630 a year is typical (at current feed-in rates), rising with inflation. Payments are now only locked in for 20 years, paying out £13,000 in total.
At the same time, solar panel prices have dropped. A typical system now costs around £7,000 rather than £10,000.
The cost-to-return ratio is less attractive now and it's far from a guaranteed win at this level, though there are, of course, environmental benefits. You should do your sums carefully and explore other options, for example Top Savings accounts.

Who is this best for?

Ideally, you'll be planning to stay in your home for a few years to recoup some of the cost, though buyers may be attracted by electricity savings and feed-in payments.
Whether it's right for you depends on system size, location, whether you're at home during the day and other factors. Use the Energy Saving Trust's Solar Panel Calculator to estimate the gain or call it on 0300 123 1234 for more advice.
You also need an Energy Performance Certificate of grade D or above to qualify for full payments. The Government estimates about half of all properties qualify.
If your home doesn't make Grade D, it may not be worth it - typical payments on the current feed-in tariff would be just £340/year.

Quick questions

How much can I earn via the feed-in tariff payments?

Households with approved solar panels are paid by a supplier for the electricity they generate, even if they use all of it themselves. (The system and installer must be approved by the Microgeneration Certification Scheme).
If you install now, the feed-in tariff is 14.9p per kWh (kilowatt-hour, one unit of electricity) of energy generated. Then there's a 4.6p bonus for every unit you don't use and pump back or 'export' to the grid (this is the same for new and existing installations).
If you installled and applied for payments on or after Tue 1 Apr this year, the feed-in tariff will be £540/year on a typical 4kWp system.
If your energy supplier doesn't hook you up with an import/export meter, it assumes you pump 50% of electricity back to the grid. Most energy firms don't supply meters, because of the cost, while the Government is still deciding how meters should work.
Here's an estimate of the money a typical domestic 4kWp solar electricity system could make. Payments for panels installed before and after Tue 1 Apr are shown:

How much can you gain?

Income generator	Savings and/or earnings per year (before Tue 1 Apr)	Savings and/or earnings per year (from Tue 1 Apr)
Generation tariff	£560	£540
Export tariff	£90	£90
Electricity bill savings	£125	£125
Total/year	£780	£760
Source: The Energy Saving Trust (figures have been rounded up)

The second table shows estimates of how much you could make over 20 years if you install a £7,000, 4kWp system. It also shows when you start making actual gains from paying upfront.

How much you can make over 20 years on a £7,000 system (from 1 Apr)

Time	Total savings and earnings	Profit/loss
Year 1	£760	-£6,240
Year 5	£3,800	-£3,200
Year 10	£7,600	£600
Year 15	£11,700	£4,700
Year 20	£15,200	£8,200
Warning: These are estimates and assume panels do not develop faults. A new c.£600 inverter (which converts electricity into power for the home), is sometimes needed after 10-15 years.

Plug your details into the Energy Saving Trust's (EST) solar calculator to see how much you'll gain. The payment scheme covers England, Scotland and Wales, but not Northern Ireland.

Can the Green Deal help pay for solar panels?

The Government's Green Deal is a way of paying for many home energy-efficiency measures from the 'savings' you'll make on energy bills. It can be used for around 45 home improvements, one of which is solar panels.
The amount you can finance through Green Deal will depend on how much a home is expected to save on its electricity bill. If this is not enough to pay for the full cost, you can still use Green Deal finance to pay for part of the cost. Your Green Deal provider can calculate this.
The loans are complex, so we've a big Green Deal Mythbusting guide to help you decide, with full pros and cons. You can search for Green Deal loan providers which will help fund solar panel purchases on this Department of Energy and Climate Change Green Deal website.

Will the feed-in payments definitely last for 20 years?

The Department of Energy and Climate Change has confirmed there will be no retrospective changes to feed-in payments. Previous changes suggest it'll alter the scheme for new subscribers only. Though remember...

20 years is a long time. There's nothing to stop future governments changing feed-in payments, though it's very unlikely for existing users.

How can I make the most of solar panels once I've got them?

In the winter, when there's less solar power, you'll take more energy from the grid. It's a good idea to set appliances to run while it's light outside, staggering them to max the savings. For tons more top tips from solar nerds, read the forum's Make the most of solar panels thread.

How do I pick a fitter?

To get the feed-in tariff, both the system and the installer should be members of the Microgeneration Certification Scheme (MCS).
As we're MoneySavers, not electricians, picking installers isn't our speciality.
So instead, you can see the firms shortlisted for the British Renewable Energy Awards 2014, run by the Renewable Energy Association. Evoenergy was shortlisted for the best installer category.
As always, get at least three quotes before signing up, and get 'em in writing. When comparing quotes, check the following are included: scaffolding, removal of the existing roof and other roofing works, internal wiring works, sorting out a connection agreement with the energy supplier, electrical connection work, and a generation meter.
Make sure the installer is a member of the Renewable Energy Assurance Limited (Real) scheme. Plus you've seven days to cancel after you sign up to buy.
Finally, never borrow from solar companies to pay for panels. Some installers let you buy solar panels on credit. If you don't have the cash upfront, paid-for panels aren't for you. The loan's interest could dwarf the savings.

Pay with a credit card for extra safety

Pay by credit card for something over £100 and Section 75 laws super-charge your consumer rights. Unlike debit cards, cheques and cash, pay in full or part (even just £1) on a credit card and by law the lender's jointly liable with the retailer.
This means you have exactly the same rights with the card company as you do with the retailer, so if it goes bust, you can simply take your complaints there instead and get money back if no delivery. See the Section 75 guide for a full explanation.
If paying by debit card, there's also valuable hidden protection that means you may be able to get your money back if something goes wrong. It's called 'chargeback', and applies to most debit and charge cards, as well as Visa, Mastercard and Amex credit cards - though it isn't a legal requirement. See the Chargeback guide.

Solar panel fitters: Don't be fooled

A Which? magazine investigation back in 2011 showed many solar companies were using dodgy sales tactics and giving poor advice to people looking to buy solar PV panels. The Office of Fair Trading also unearthed poor practice in 2013.
In 2011, there was a rush to provide solar panel systems when the payments to generate electricity were an eye-watering £1,100+/year. Some companies have pulled out, and things have changed since then, but be vigilant.

What happens if I sell my house?

Hopefully potential buyers will be pleased about the electricity savings and, if you paid for the system, the potential feed-in tariff profit. Yet there is always the chance that they won't like the look of them, so it's worth asking local estate agents for their experiences.

Can I change electricity providers?

Yes. Don't, for heaven's sake, think this locks you into your energy provider so you can't get cheaper bills (join the MSE Cheap Energy Club to stick on permanently low prices). The feed-in tariff is a universal arrangement that Ofgem runs across providers. See Switching Provider.

What if the solar panels break?

The Energy Saving Trust says little maintenance is required on a properly-installed, well designed solar PV system, though you'll likely need to replace the inverter within about 20 years (£600ish). Of course, though, anything could go wrong. You also need to check your home insurance covers the system and add it if it doesn't.

Do you need planning permission?

You don't generally need planning permission for solar systems. The big exceptions are if you've a flat roof, the property is listed, or it's a conservation area.
You might need to get approval from your council's building control team though. Check with your local authority. If you get a free system, your provider will normally do this for you - but always check.

Can you get free solar panels?

It's possible to find companies that offer to fit panels worth £7,000 for free. However, you don't get paid - they keep the lucrative feed-in tariff. So if you have £7,000 knocking about, you may be better off buying panels yourself.
With free panels, you still get the £130ish per year electricity savings (as calculated by the Energy Saving Trust). By setting your appliances to use energy during daytimes you can increase this sum, plus prices are predicted to rise hugely over 20 years, which means your savings will rise too. Another bonus is that the firms maintain the panels and pay for insurance.
Before the payments to generate electricity were cut, there were a lot of free solar panel companies. Now many have pulled out, and it can be harder for some to get free panels.
We've listed one free provider below - there are a few other smaller companies which also do the same, but we haven't been able to check them out.

Free solar panels for homeowners across much of England

A Shade Greener*

A Shade Greener* has fitted free panels to over 40,000 homes to date. Panels are fitted free under the government's FIT Scheme which launched in 2010 as a way to encourage people to use more renewable energy.
Who is eligible? A Shade Greener covers much of England - you can see a map of the areas it covers (excludes Scotland, Northern Ireland and most of Wales). It doesn't routinely cover London, the South East, East Anglia or Cornwall, though if you live there it advises you apply anyway to see if you qualify.
You need to own your home, or get the permission of the homeowner if you rent. Your roof must usually be around 24 square metres facing due south, or within 55 degrees of south. Maintenance is included and A Shade Greener pays for the insurance - the company also says it will fix your roof in the event it is damaged by the panels.
Is it any good? It has some good feedback from forumites and there are no charges at all, even if you need non-standard scaffolding. It also insures you, so repairs won't cost you a penny. A Shade Greener also says it has never had an insurance claim. But once you sign up, you'll need to agree to a 25-year lease. You can't buy the panels, but after 25 years, they are yours to do what you like with. Or you can ask A Shade Greener to remove them which they'll do free of charge.
How much can you save? According to A Shade Greener, its customers often save much more on their bills than the £130 the Energy Saving Trust says is typical for solar panels in an average household.
The Energy Saving Trust bases its estimate on users consuming 25% of the energy they generate. A Shade Greener says its users consume a higher proportion and claims they save an average of 37% a year on their electricity bills, with a quarter saving as much as 50%. However, these figures are from research carried out in 2011 - A Shade Greener wasn’t able to provide more recent figures.
How does the company make money? As with other companies offering free panels, A Shade Greener gets to keep the feed-in tariff. It also says the business has up to £380 million in funding from pension companies and investors and is financially in good shape. It has fitted around 45,000 systems in total and is currently making around 350 installations each week.
What happens if I move? The panels and the 25-year agreement for them stay with the property - there's no buy out clause. It doesn't affect mortgages or re-mortgages though - mortgage providers can terminate the lease at anytime thanks to a break clause in the agreement.

What to watch out for with free solar

Your home is your most valuable asset, so think very carefully about what it means to sign up for a 25-year commitment. Don't read this as a "don't do it". It's a "be prepared that if you do it, it may not be plain sailing".

Read these key free solar panel points

Check with your mortgage provider

Officially, mortgage providers treat solar leases on a case-by-case basis. Yet we asked several of the big lenders and they said they were usually happy with the leases in principle, as long as the buildings insurer knows and you've got planning permission (always check with your lender).
Mortgage companies may charge an admin fee to grant consent for a free solar panel lease.

Ask the right questions

Are you really sure it's for you? Read Consumer Focus's list of questions to ask before you apply and get the contract checked by a solicitor.
Have a look at the Real Assurance Scheme's list of info that free panel companies should give you. The scheme's been set up by the Renewable Energy Association.

Check your contract carefully

Read your contract carefully before signing, preferably seeking legal advice.

You are signing up for a contract for two and a half decades

Some free solar panel companies used to let you buy them out if you came into the cash later. However, with A Shade Greener, there's no option to buy out the contract.

What if the free solar company went bust?

If the free solar panel firm went bust, it's likely the panels would stay on and be maintained. The rights to collect your feed-in tariff would be the creditors' biggest asset, so chances are they'd sell this right on to another company.
Yet this is a fairly new business model, and things could change if the Government withdraws the feed-in scheme, so it's impossible to predict all eventualities.

Roof repairs can be tricky

A Shade Greener says it will fix your roof if it's damaged by the panels. But if you want to fix your roof for a reason not connected to the solar panels, free solar panel companies sometimes make you cover their feed-in payments in the meantime, so always check.

Crucial tips to save £100s on energy bills

Solar panels are a big move. First, ensure you're on the cheapest energy tariff and do the energy-saving basics.

Switch energy provider

Ditch and switch energy provider and you can save £100s each year. Our Cheap Energy Club checks you're on the cheapest deal and if you're not tells you the best deal. Plus we'll keep monitoring your tariff and the market to ensure you're always on the cheapest deal. To encourage you, there's usually up to £30 extra if you switch gas and electricity via the club.
It's the same gas, the same electricity, the same safety. All that changes are the customer service and the price you pay. Normally, switch and you risk the provider hiking prices, or giving you a cheap deal for 18 months then ramping costs. So every month, without you doing anything, we do a comparison for you, and alert you when it's worth switching again.

Can you switch energy with solar panels?

Yes. You don't have to get your electricity supply and feed-in tariff from the same company. That means solar panel users can switch freely on Cheap Energy Club, just like everyone else. After switching, payments still come from the current feed-in tariff provider, so nothing changes.
If you want to switch to a different company that pays you the feed-in tariff, contact your feed-in provider to see if it's possible. Usually, if you want to get the payments from a different supplier, you'll have to switch energy to that company too. As feed-in payments are fixed and therefore the same across every provider, it may not be necessary.
At application stage, you can't choose a feed-in provider you want, you have to get the feed-in payments from your current energy supplier. A full list of feed-in tariff providers - or 'licensees' - is on Ofgem's website.
There are more ways to cut energy costs, such as always paying by direct debit, which shaves £100 or up to 8% off your annual bill. For a full list of tips, see Cheap Gas and Electricity. If you're on Economy 7, you can slash costs even further by using storage heaters, washing machines and dishwashers through the night. See our Economy 7 guide for full info.

Free insulation and boilers

The big energy providers are giving wads of freebies to people on benefits, from new boilers to insulation. It's because they have to help certain groups save energy.
New boilers alone typically cost £2,300, so this is a fantastic freebie. A boiler is a big contributor to your energy bill - so the more efficient your boiler, the more heat it produces from each gas unit.
Depending on its age, a shiny new efficient one could save you up to £300/year. (These figures may be revised in March.)
Wall and top-up loft insulation can slice up to £160 off energy bills per year. You could qualify if you get tax credits or income-based benefits, such as pension credit or income support.
To speedily uncover these crocks of gold, including a rundown of current offers, see the Free Boilers and Insulation guide. Also see Home and Energy Grants for a full list of hidden cash.