Solar photovoltaic (PV) panels allow you to create your own electricity, significantly reducing your energy bills and your environmental impact. And, you can sell the electricity that you generate to the National Grid and make an inflation linked, tax free return.

Solar PV panels generate electricity from sunlight. They capture the sun’s energy using photovoltaic (PV) cells and convert the sunlight into electricity, which can be used to run your household appliances and lighting.

And, you don’t need direct sunlight for PV panels to work – you can generate some electricity on a cloudy day, even in winter.

Solar PV panels are therefore a great way for you to save money, help the environment and generate a tax-free income.

Fit Solar PV Panels for an Inflation Linked Tax-Free Return

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Benefits of installing Solar PV Panels

There are many benefits to fitting solar PV panels in your home. These include:

• Reduction in your energy bills – Once you have paid for the installation you can expect to make significant savings on your energy bills by creating your own electricity. A typical PV system provides around half the electricity a home uses in a year
• Better for the environment – Solar electricity is a green, renewable energy and doesn’t release any harmful carbon dioxide (CO2) or other pollutants
• Selling electricity to the National Grid – If your system is producing more electricity than you are using then you can sell it to the National Grid using a system called the ‘feed-in tariff’. This generates an index-linked, tax free income for the life of your solar PV panels

How Solar PV panels work

Solar PV panels can be attached to your roof or to your walls. Each panel is made up of one or two layers of semiconducting material and when light shines on the cell it creates an electric field across the layers. The stronger the sunshine, the more electricity is produced.

The electricity then flows through a cable and is collected at a central point which is often located in your roof space. It is then converted from a ‘direct current’ (DC) to an ‘alternating current’ (AC) and is carried into your home for you to use.

PV cells come in a variety of shapes and colours and the strength of a PV cell is measured in kilowatt peak (kWp). This is the amount of energy the cell generates in full sunlight.

Are solar PV panels suitable for your home?

There are various factors to consider when you are considering installing solar PV panels. These include:

• The aspect of your home – You will need a roof or wall that faces within 90 degrees of south and that isn’t overshadowed by buildings, trees, chimneys or TV aerials. If your panels are overshadowed they won’t produce the same amount of energy and experts recommend that your panels should not be in shade between 10am and 4pm
• Your homeowner status – If you have a leasehold property then you will need written permission from the freeholder to install solar PV panels. If you rent your home then you will need your landlord’s permission
• The type of property – If you have a basement or mid-floor flat or apartment then you won’t be able to fit solar panels
• Whether your property is protected – You don’t normally need planning permission but you should check with your local planning officer, especially if you live in a conservation area or your home is listed
• Your roof – Solar panels are heavy and so your roof must be strong enough to take the weight of the solar PV panels. An installer will be able to advise you further

Choosing and installing your Solar PV panels

There are several different companies that can supply and install your solar PV panels for you. These range from large national installers such as British Gas to local companies who operate in your area.

Always shop around when buying solar panels and make sure you pick a brand and installer that you can trust. The consumer group Which? recently warned that some claims made by firms selling solar PV panels could not be substantiated.

The recommended advice is that you should be wary of any company that offers a quote without visiting your home to carry out a proper survey, or a firm that makes grand claims about the income you will receive from your panels.

In addition, make sure your installer is approved under the government’s Microgeneration Certification Scheme.

Making money through selling the power you generate

It is possible for you to generate an income from your solar PV panels by selling your surplus or unused electricity to the National Grid. This is called the ‘feed-in tariff’.

If you are eligible to receive the feed-in tariff, you will benefit from:

• A ‘generation tariff’ – This is a set rate paid by an energy supplier for each unit of electricity that you generate. Once you join you will continue on the same tariff for 25 years
• An ‘export tariff’ – You will receive an enhanced rate from your energy supplier for each unit of electricity that you export back to the National Grid that you don’t use at home
• Savings on your bills – Generating power for your appliances means that you don’t have to buy as much electricity from your energy supplier. This means that your electricity bills will fall, depending how much energy you generate and how much of it you use at home

Insider Buying Advice

Typical Costs

The costs for installing solar PV panels vary depending on the type of panel and the amount of electricity you want to be able to create.

The costs of solar panels have fallen in recent years and an average system (2.7kWp) costing around £10-12,000 (including VAT at 5%).

Solar electricity systems can cost in the region of £4,000 to £5,000 per kWp installed, but the costs per kWp should reduce as system size increases. The more electricity that your solar panels can generate, the more it will cost, but the greater your savings will be.

If you choose solar tiles or panels built into your roof these will cost more than standard solar PV panels.

Special Schemes and Grants

Some energy firms offer deals whereby they will meet the costs of installing solar PV panels in return for you signing over your rights to the income generated from the ‘feed-in’ tariff.

While these deals will help you save money on your electricity bills (as you will generate some of your own power) you will lose the benefits of generating extra income. You should therefore consider such schemes carefully as you may be much better off paying for the installation yourself and benefiting from the long term, index linked, tax-free income generated through the feed-in tariff.

Calculating Your Return On Investment

Generating your own power means that you don’t have to buy it from your energy supplier. This means that your energy bills should be lower.

Based on the 1,955 kWh of electricity every year generated by an average consumer, British Gas say that if you generate half that amount yourself you would save £138.80.

In addition, the government currently pays 43.3p for every kWh of electricity that you generate and use at home. Based on the average generation of 1.955 kWh per year, you’d earn £846.51.

On top of this you will also receive an extra amount for every kWh of electricity that you generate but don’t use that is fed into the National Grid. If you therefore sell half of the electricity you produce (based on an average annual generation of 1.955 kWh) you’d make an additional £30.

Your total savings would therefore be in excess of £1,000 per year. Feed-in tariffs are also index-linked, meaning they will hold their values during the lifetime of your panels.

The Energy Saving Trust agrees, saying that if your solar PV system is eligible to receive the feed-in tariff it could generate savings and income of around £1,100 per year.

As well as cost savings, the environmental benefits of solar PV panels are significant. The average home would save around 1.2 tonnes of CO2 a year.

Ongoing Running Costs and Maintenance

As a solar PV system has no moving parts or components, it does not normally need regular servicing. The panels are built to withstand environmental conditions and are generally cleaned by rainfall.

You should expect your solar panels to operate for 25 years although you may need to replace your inverter over the lifetime of the panels.

You should routinely inspect your system from ground level and call an engineer if there are any signs of damage. You should also try and keep trees from overshadowing your panels as they will reduce their energy generating potential.

So, if you want to benefit from a long term income, lower energy bills and to significantly cut your carbon emissions, installing solar PV panels are the perfect answer.