Investing in Solar Panels in the UK

Question

I am based in the UK (in England) and am thinking about installing solar panels on my roof.

The problem I am having is actually finding some resources which I can use to get some objective information. The only information I seem to be able to find is coming from Solar Panel installation companies, who of course have a vested interest in my buying a bunch of panels from them.

I can see quite general advice that this is a good investment (e.g. Which?), which has sparked my interest, but I want to get hold of more specific information.

There are two things I'm trying to find out in particular. One is quite generic - to learn about the mechanism by which one sells solar electricity back to the grid, any grants, tax breaks etc. The second question is far more specific to me - essentially to get ballpark estimates of the kind of revenue I can expect to generate.

Does anyone have any idea how I can go about answering these questions (the second in particular), but from an unbiased source?

Update: Panels now installed, using my accepted answer as a great start point. I've also added an answer below to share my expereince, hopefully it'll help people going forward.

Answer 1

The Energy Saving Trust (EST) is an organisation that has no vested interest in selling you things (although their mission is certainly to encourage takeup of renewables). They have a lot of good advice on their website - I suggest having a read from this starting page. Make sure you're looking at the page relevant to the right part of the UK, as the rules can be different.

To answer your specific questions very loosely:

The mechanism by which you get money back for electricity that you generate is Feed-In Tariffs (FITs). I'm not sure whether there are also any tax breaks or the like for installing generating equipment. I'm deliberately not going to give the actual FIT rates that are paid here, since they vary fairly frequently with political whims. Best to check the linked page. Note that once you have a system installed, the rates that you receive are fixed for a fairly long period (in the order of decades), so you can plan ahead - the variation is purely in terms of what the rates are when you start.

As for the amount of money you could earn, or the payback time: This is dependant on a lot of factors, including,

• Your latitude
• The amount of sunshine vs cloud that you get in your part of the country
• The angle of your roof
• Any trees, hills, or other shading
• The technology used

To get an answer that you'd want to base an investment decision on you may want to speak to a consultant. However, the EST has a calculator here that can hopefully give a rough idea.

Answer 2

I was quite surprised by the number of upvotes the question got, and as I've now gone ahead and had the panels installed, I'll add a few more details of what I did, in case it is of use to anyone going forward.

First stop was the MCS web site. (this is an absolute necessity, since as @EnergyNumbers says, to qualify for the feed-in tariff the installer has to be MCS-registered)

From this site it was simply a question of calling some local firms and having them come around. I had 6 companies visit, of which 5 gave quotes. (I find it strange that one guy didn't even bother quoting, but I do tend to find this happens with tradesmen.)

With the exception of one guy, who advised to only install as many panels as were required, everyone else said to install the largest array possible. The upper limit to qualify for the feed-in tariff is 4kW, which equates to 16 panels. (Panels seemed to be a standard 250W, regardless of manufacturer.) So I have ended up with 16 panels on the roof.

The quotes were all quite good in terms of projected returns etc., but you do realise that these are "finger in the air" numbers. Nominally, my system will pay for itself in 7 years, which sounded great to me. But how accurate that number is...there are a lot of variables and a lot of assumptions.

The main difference in the quotes was the brand of panels, plus whether to use inverters or micro-inverters.

As for the difference between the panels, it wasn't something I could particularly rationalise - the closest I got was the difference between driving a Mercedes and a Toyota. A big difference in price, but both will get you from A to B. In particular I looked at guarantees of performance levels (i.e. there will only be an x% drop in efficiency over y years) and basically discovered that the panels were much of a muchness.

I was advised by several of the fitters to avoid the generic Chinese panels, simply because there is no comeback if there is a problem. And in fact, when people were talking about the different brands, a lot of them were household names. Panasonic, Hyundai, Benq, for example. The more expensive quotes were with German panels (supposedly the best quality, hence my Mercedes comparison).

Inverters was something I learned about along the way. Each fitter had a preference and I noticed early on that they would be happy to give me all the "pros" of their preferred choice, without mentioning the "cons". So I really felt the benefit of speaking to half a dozen people here.

As far as I could summarise:

• with inverters, there is one of them in the system, it is generally located indoors (making maintenance easier), but the panels basically act in series - so one shaded panel will limit the output of the other fifteen sunlit panels. Also, inverters are not guaranteed as long as micro-inverters, so presumably have a shorter lifetime.
• micro-inverters are a newer technology, exist one-per-panel, and sit next to the panels on the roof, so there are 16 of them and if any require maintenance, its up on the roof. However, because of this each panel acts on a standalone basis. So if one panel is shaded, it won't affect the output of the other fifteen sunlit panels. The telemetry options look good on these too, apparently you can monitor each micro-inverter via the internet. My experience was that an array of 16 micro-inverters added around £1k to the cost of a single inverter.

So obviously there's a bit to think about in this area. For me, my roof has absolutely no shading - the panels will all get the same light - so this drove my decision to go for the cheaper inverter solution.

Last but not least, the price. The lowest quote (and the one I ended up going for) was around £4800. I went through the contract with a fine tooth-comb on this one, as it was quite a bit less than the other quotes. But having gone for it, the installation went very smoothly and the system is working well (Benq panels, Samil inverter, which actually has an ethernet port and provides good telemetry both via the lan and the web), so I am a happy bunny.

The next lowest quote was around £6k (give or take), with a couple more at £7k. The most expensive came in at over £8k. As I say, they were all offering different panels and inverter solutions, but nothing really so different as to justify a £3k price difference. So the moral here is that it definitely pays to shop around.

Answer 3

In Britain, the important bit is to make sure that your installer is MCS registered, and that the equipment they supply will be MCS registered.

This will ensure that you are eligible for the Feed-in Tariff (aka the FIT)

The FIT is untaxed. The amount you receive will be determined by the date of commissioning. A system that is commissioned in a year's time, will receive less per unit than one commissioned now.

The amount you'll actually generate is very much determined by local circumstances. It's also driven by the climate - levels of sunlight, cloudiness, and temperatures. The PVWatts calculator gives a rough estimate of local generation potential.

Note that different PV technologies will produce different amounts of power - some panels perform better for a given level of ambient (indirect) light. And different systems have different internal losses, and those might be of the order of 2-10%. NB those losses will typically manifest as heat in the inverter: if that heat isn't vented away, then you shorten the life of the inverter. But all being well, you might expect to replace the inverter only after ten years.

Answer 4

I realise this thread is a little old, but for the benefit of current and future readers, I would like to share some valuable insight and a detailed infographic of UK solar PV payback period and earnings by region, that I have put together recently (July 2015).

Answer To 1st Part - UK Solar PV Incentives

Earnings from solar PV in the UK can be summarised by the following equation:

Solar PV Earnings = Bill Savings + FiT Generation + FiT Export

Where;

Bill Savings = The savings you make on your electricity bill.

FiT Generation = The amount you earn for generating electrcity.

FiT Export = The amount you earn for exporting surplus electricity to the grid.

The FiT (Feed-in Tariff) is the main financial incentive by the government through which you earn money for each unit of electricity you generate and an additional amount for each unit of electricity you export to the grid. The FiT rates are constantly changing (decreasing), the latest rates can be viewed at the Ofgem website.

Three important points to consider:

1. To benefit from the Feed-in Tariff, your system must use MCS accredited components (panels, inverters, etc) and must be fitted by an MCS accredited installer. You can verify whether your installer is MCS accredited at the MCS installer database. MCS accredited installers will usually use accredited products, but you can double-check whether the products recommended to you are MCS accredited at the MCS products database.

2. The Feed-in Tariff is designed to be degenerative (decrease with time). If you are planning to install solar panels on your roof, the earlier you apply for the Feed-in Tariff the better.

3. As PeteH pointed out in his conclusion, quotations can vary significantly between installers. It is essential to compare prices to get the best deal. Savings of £2k - £3k are not uncommon.

Answer to 2nd part - UK Solar PV Earnings

Different sources give various figures on the payback period and earning potential of solar pv in the UK. The Energy Saving trust's solar PV calculator is a good starting point. Unfortunately, their calculator does not account for the Retail Price Index (RPI) or rising costs of electricity. Two real world factors that significantly affect solar pv earning projections.

Here at SolarLinker, we have taken data from the Energy Saving Trust, adjusted it to account for these two factors and plotted it on colour coded maps for easy interpretation (attached below). Figures shown are for a 4kWp solar PV system, mounted on a south facing roof at a 45 degree angle. All other assumptions and sources are listed at the bottom of the infographic below for your convenience.

It is important to note that these figures are estimates. As Simon correctly pointed out, there are many variables that affect solar performance. Without a site visit it is impossible to accurately predict the solar potential of your roof.

I Hope this helps :)

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