/ Home & Energy

Solar panels – should you take the plunge?

A recent survey of solar panel owning Which? members found that 97% were satisfied with their solar system and 93% would recommend it to their friends or family. Are you warming up to solar power?

Most took the plunge in 2010 and 2011 when the feed-in tariff (FIT) was first introduced.

FIT pays owners of electricity-generating renewable energy technologies (such as solar panels or wind turbines) a fixed rate for a period of 20 to 25 years. The initial generous FIT rate meant that an average domestic solar photovoltaic (PV) system could pay back in seven to eight years, meaning the remaining years of FIT payments would be profit. This was seen as a very attractive financial investment by some and soon we saw nearly half a million houses in Great Britain with solar panels.

So, in order to control the spiraling cost of FIT (by the way, FIT is paid for by consumers, via a levy on electricity bills), in 2012 the government cut the rate of FIT by more than half.

So are solar panels still a worthwhile investment?

Should you buy solar panels?

We decided to look into this and calculated that, as long as you have the right roof (South facing, near to a 30 degree tilt and with no shading), solar PV panels could still be a worthwhile investment. This is because the cost of solar panels has dropped.

When we surveyed 1,400 Which? members in March 2014 and asked them how much they paid for their solar PV system, we found that costs had indeed dropped: from about £11,300 on average for a 3.6-4kWp system back in 2010 to £7,286 on average in 2013/14.

But with FIT rates being reviewed regularly by the Government, it makes more sense now than ever to get a good installation; an installation that will go without a hitch and reach its full potential to ensure your system will pay back with FIT.

Solar panel problems

One in five have experienced a problem with their solar PV system since it was installed. The main cause of problem, in 7% of cases, was to do with the inverter, which is a key part of a PV system, converting direct current produced by the solar panels into usable alternating current. More unexpectedly, 1% reported birds nesting under their panels!

Do you have solar panels? What has been your experience? Have you experienced any problems? And has the system met your expectations?

Comments

Had solar panels installed on the 1st March. Benefitted from free daytime electricity (mostly) since then, FIT payments from 9th March. Just put in my first reading and I am expecting £215 return for my first three months. My roof is south south west so not perfect but I expect an annual payment of around £800. Installation cost with micro inverters £6300, that’s 14% interest approx. Definitely go with micro inverters, they cost more but produce much better returns than a single inverter.

Thanks Terfar. I certainly would not want several tonnes of water sitting on the internal structure of the house [although perhaps it could occupy the garage which is now a bit too tight for getting in and out of our car]. However, it is a novel way of overcoming the age-old problem of storing energy and it could work in a bespoke new-build of the Grand Designs type. I have always thought there must be a way of storing energy by heating something up and keeping it hot then releasing the heat when needed, but the amount and volume of insulation material required seemed to be a big drawback. My mind has also turned to the concept of a super-sized vacuum flask where a double-skinned evacuated casing would protect a volume of heat retentive material. It’s a pity the brilliant engineers who brought steam railway engines to a peak of efficiency are no longer with us, but of course their machines were not storing energy except briefly until the pressure diminished. Alternatively, the build-it-yourself domestic nuclear reactor could be developed for the keen hobbyist. It’s only a matter of time before the rising cost of coventional energy forces the invention of innovative solutions just as the oil and gas exploration industry has found it economically worthwhile to prolong the active life of fields by exploitation techniques that would have been impossible and unaffordable a few years ago.

Well micro nuclear generation has been used on spacecraft, so maybe not beyond the realms of possibility.

Beware of these if you live in a small and/or old house:

1) If your roof can’t accommodate more than 10 panels, forget it. Each panel can produce 250W max, so don’t think you can get 4kWp (kilowatts peak – the figure bandied about, which is actually the maximum the power companies will allow on a domestic roof) unless you’ve got a big roof. 10 panels can only produce 2.5kWp. I could only fit 6 on my Victorian cottage – 1.4kWp at the time (qv). Although the panels now cost less, the inverter price has not dropped significantly, and other costs, like labour and scaffolding, have *increased*. Although the ‘standard’ 250W panel is 1.6m by 1m, there are some about that are 1.1m by 1.8m and can produce 320W. Depending on your roof, you might just be able to squeeze a bit more out by fitting fewer of the larger panels.

2) Old houses with 9″ solid walls are most unlikely to get an Energy Performance (EP) rating of D or better – a requirement to get the FiT in the first place. Most Victorian cottages are lucky to scrape F, which will only get a pittance of 7p/unit. The authorities won’t take into account that to insulate the walls better you either have to put up with even smaller rooms (which I am not prepared to), or put on external insulation (which I can’t without encroaching on the street and a neighbour’s land). You also have to get to Band D or better *before* applying for the FiT – you can’t do it retrospectively.

I’m lucky since I got in just before the FiT drop in March 2012 and this unfair EP regime came in. I’m very pleased with my 6-panel system, but wouldn’t consider installing on my tiny roof now the rules have changed.

As for finances: regard it like an annuity. You say goodbye to your capital, but you usually get a better return on investment (RoI) than any pension annuity! My system cost me £5.5k and I’m getting about £580 per year in FiT payments – ie. better than 10%.

To find out if your roof is suitable, a good calculator is available on http://re.jrc.ec.europa.eu/pvgis/apps4/pvest.php?lang=en&map=europe. From experience since installation, my south-west facing roof is doing better than local due-south roofs, which I think is because afternoons here often have better weather than mornings – particularly in late summer and autumn, when misty mornings often give way to sunshine later. Also, a cloudy early morning is better for me since clouds radiate more than blue sky when the sun isn’t shining directly onto the panels.

Rod says:
23 June 2014

I had solar panels fitted in April this year & have been very satisfied with the results. I have opted for individual inverters, one per panel, fourteen in all. They do cost more (about £600 in my case) but have several advantages:

1. If an inverted fails you only loose that panel.
2. They carry a 20 year warranty.
3. The performance of the system can be monitored online giving current & historical data.
4. They are attached to each panel thus avoiding finding space or a large inverter.
5. They are more efficient.

Being near the south coast (Dorset) we get a considerable amount of sunshine, currently generating up to 25 kw/hrs on a good day.
I suspect that I am exporting, to the grid, more than 50% of generated electricity as there are only two of us in the house. Hopefully the fitting of Smart Meters will give a more accurate export figure.
Perhaps in the not too distant future it may be possible to store some of the generated electricity for use after dark.

Having one inverter per panel considerably adds to complexity, but as you say, if one dies you only ‘lose’ the associated panel. You also minimise loss of output from partial shadowing – even a telegraph pole can considerably reduce the output of an affected panel and, if they are all wired together, this will affect the whole array since the shadowed panel will act as a ‘bottleneck’.

S.Sedgley says:
23 June 2014

We moved into a new 3 storey house in the Summer of 2012, with a solar panel already installed by the builders for heating the hot water. We found it wasn’t working at all,so the building co. came out to check it and said it was empty. 2 men then came back with a large cannister of fluid to top it up in the airing cupboard. After pouring in the entire contents of the cannister the levels hadn’t improved, so they then found there was a leak. We then had to have scaffolding put up and the repair done and the fluid topped up. This was all done at the builders expense. Recently other property owners have had a variety of problems. They have had to have these resolved at their own expense, by another company and have been told that these units should be serviced every 2 years at a present day price of £150 . This seems to defeat the cost saving of gas.Is this info correct?

WE WERE WRONG TO THINK WE NEEDED A SOUTH-FACING ROOF
Our roofs face East and West. We had 8 panels installed on each slope 10 weeks ago totaling 4kW.
Total cost £6,500 (half what the energy performance certificate assessor had estimated for a 2.5kW array only last August!) Immaculate installation. With the gadget that feeds unused power second-by-second into the immersion heater (an absolute must-have!)
So – in 10 weeks we have generated (…gets up to look…) 1,234 kWh. And we have used 148 kWh in that time while the gas meter hasn’t moved. So we have generated 7.4 times as much power as our house has used. Meanwhile absolutely free hot water for as many showers as we like. Just the heat that would have landed on the roof tiles anyway – WOW – How cool is that!
OK, it’s summer, and our beautifully-lit house hasn’t got an old-fashioned, hot light-bulb anywhere, but even so.
Off this afternoon to be shown a friend’s electric car. There is an indescribable satisfaction in being part of this revolution. I am amazed my the serious power these systems generate – and only using about a third of our roof area.
By the way – why does your report fight shy of even mentioning our responsibility to cut emissions as one of the benefits of solar panels. Surely you are not afraid of Nigel Lawson, or Jeremy Clarkson, or even the Secretary of State for the Environment. These people will grow up one day, meanwhile the rest of us have to compensate for them, and this is a brilliant way to start.

William Baxter says:
24 June 2014

I had a 5 KW system fitted on the 7th of September last and even in Cloudy North Coast Northern Ireland I have already generated just over 3 megawatts. I am happy with my system which to be honest was the most expensive on the market because after 6 weeks of Research I concluded that like buying a car there are good and not so good systems on the market. My system is the Enphase micro-inverter system which means each of the 20 panels has it’s own Inverter ( so much more efficient and reliable than ‘String’ inverters. I will know exactly whow well I am doing in September but so far I am very Satisfied. Do your self a favour and fit the SOLIC 200 which means hot water all day. Brilliant system.

Rodney Ballantyne says:
24 June 2014

I am surprised at the lack of arithmetic common sense in this discussion. Has nobody ever heard of DCF? In plain English if you have the £7286 to invest in solar panels you are foregoing the interest that you will receive by investing that money elsewhere. At present the interest rates for savers are low but the historic long term interest rates was around 5%, so you have to deduct 5% of £7286 each year from the FIT and bill savings,that is £364 each year so the real income is only £242 per year.The “payback time” is therefore 30 years! In addition these panels are subject to wear and tear and get dirty fairly quickly in any urban environment ( look at how often we have to clean our windows!) and that layer of crud reduces the efficiency of the panels. The only way to maintain the advertised efficiency is to clean them regularly which is not something the householder is likely to do himself, so it will cost him to get a contractor to do that. Again that does not appear in the Which?calculations. I fear that Which? is misleading it’s members by failing to do the simple arithmetic required.

On the other hand, solar power is decreasing the amount of power that has to be generated, so there is an environmental benefit, and those who have invested in solar panels deserve to be congratulated for their contribution.

There is more to life than money.

Well your calculations are fatally flawed because you have forgotten a HUGE factor: power used during generation time is power that you’re not forking our 15p+ per unit to your energy provider.

When you factor in the generation payment, FIT payment and what you would be paying the provider, it equates to over 33p per unit TAX FREE. So far this month, I’ve used 260 fewer Day units and 120 fewer night units than the same period last year (and June weather was really excellent last year.

My 4k installation cost me a smidgen under £6k. I’m on target to definitely recoup costs within 6 years and probably only 5 years. Obviously, I cannot be exact because I have no more idea of the future weather than you can predict the financial markets. But in my favour, interest rates are going to rise very slowly, energy prices will continue to rise (hopefully more slowly) and summers are suppose to get hotter.

So I believe that this is a no-brainer investment that will yield huge benefits in the medium/long term. It makes annuity purchases look the rubbish and makes current ISA investments almost as poor.

Wavechange: Good point too. Sorry I gave your post a thumbs down. It must have popped in whilst I was typing my reply to Rodney and thought I was give a negative thumb to his post!

Mark Dykes says:
24 June 2014

Fair point but:
1. I’m getting 16% payback so even deducting this notional 5% the payback time is still reasonable.
2. Does your analysis take into account the inflation-proof and tax-free nature of the return?
3. And the increase in value of the property?
Others can address the surface properties of the panels.

Rodney Ballantyne says:
29 June 2014

Sorry, you have not spotted that the Which? calculations included the savings in not paying the energy supplier!

It’s OK Terfar – I’ve given Wavechange his thumb back so he’s back where he started now.

Obviously, Terfar’s analysis is the right one to consider taking account of the free energy element. Looking at this issue in a totally mercenary way is probably not the best idea but if it has brought people into renewable energy generation thus relieving the fossil fuel production, and encouraged a more dedicated look at consumption, insulation, and optimisation of energy use, it is a good thing notwithstanding the financial advantages. Naturally people should think carefully before splashing all their hard-earned on a private solar system, because unlike an ISA or an investment in shares you cannot readily turn it into cash if necessary – it’s arguable that that limitation is factored into the yield. A prudent solar panel owner would probably save some of the proceeds of their investment for a rainy day.

Royston rogers says:
24 June 2014

I am getting over 6 times more money + Free power and that increases as the prices go up .

I can’t see prices going down over the next 25 years.

With INTREST rates so low as long as you don’t need to borrow the money then it’s a good idea if you faceSouth

Ian says:
25 June 2014

All the advice says that you need to take shade into account – but I don’t think I have seen written the effect of shade.
If you have a string of 7 panels in good sunlight feeding in to one inverter, they may be generating 1.5 kW of power. If then the sun moves slightly and something casts a small shadow over part of one panel, the output of the entire string will fall to, maybe, 250 W. That is, despite 6.9 of the panels still being in good sunlight.
I can see that there is an advantage to having individual inverters.

I agree. If you have considerable shade crossing the roofline at various times of the day, individual micro inverters on each panel is an essential upgrade. This is especially important if it partially shades during peak sun hours – between 10am and 3pm.

We have a nearby large oak tree that creates a little shadow across part of our roof between 4pm and 5:30pm this time of year. In spring and Winter when defoliated, it has negligible affect. On a strong sunny day, our generation power drops from 4kW to around 2.5kW max for that period. I had discussed having micro-inverters with the installer, but decided that it wasn’t worth the extra. By 5:30pm, the sun is well past optimum anyway (the panels face SSE) and we are only getting around 1.8kW when the roof is back in full sun anyway.

Dave says:
26 June 2014

Any info on Gallium panels? Spanish panels apparently, little uptodate UK info on web search, but a quote claims to be the sole supplier in the UK.

Still at the info gathering stage, grateful for any info and finding the comments here very useful

These are a common alternative because they are smaller and lighter because they have a more efficient conversion density. But they are much more expensive and you should only consider them if you don’t have roof space, need 4kW and have an optimum site.

Spain certainly don’t have a monopoly on CIGA (Copper Indium Gallium Arsenide) panels. You’ll find an artcle on Wiki.

I had solar panels installed in March, the article in Which? does not mention micro inverters which produce 20-28% more power than a single inverter. They do cost extra though, my 16 panel installation cost £6300, would have been £5300 with a single inverter. Just had my first FIT payment, £249. I expect this to be slightly higher next quarter then lower over winter but an expected annual payment of £800 represents 12.6% interest, can you get that anywhere else today (and free daytime electricity!)

Micro-inverters only have significance if you have partial shading. Otherwise they are no more/less efficient at converting dc to ac than a dual-line single inverter. Your FIT payment is almost the same as mine for the quarter just finished.

Dave says:
28 June 2014

many thanks. I’m lean toward these despite higher costs. Our roof will take all 16 panels on an east/west and south split.

Worth doing a great deal of research and avoiding the high-pressure sales techniques lot.

over 12% interest ? I wonder what the overall average will be over 20 years

The 12% is calculated for the 20-year period using prediction charts. My calculations suggest that 12% is probably the minimum.

But no one can predict the weather, the reliability of the panels and inverter nor how much (grid) electricity you save or the cost of that electricity. The 12% is based on prices now. If electricity increases in price, the panels prove 100% reliable and we have great summers for 20 years, then 12% may look very pessimistic.

Of course, after 20 years, the owners lose the generation payments, but they will still get the benefits of free electricity thus saving on grid price electricity.

Sceptic says:
28 June 2014

There is a fundamental difference between investing your capital in a bank or building society account for say 20 years and receiving an annual interest payment of say 4 percent after income tax and instead investing your capital in solar PV panels and receiving an annual income from some combination of FIT and savings from needing to purchase less electricity from a suuplier.

After 20 years you get your original capital back from the bank or building society whereas the solar panels will be near valueless.

So, you should not simply regard the two different types of annual income as being directly comparable. You need a higher annual income from the panels to compensate for the lack of return of capital at the end of the life of the panels.

Many of the contributors to this conversation do not seem to have appreciated this difference and I don’t remember seeing any guidance or help from Which on this aspect.

What has been said in several posts is that investing in pv panels is more akin to buying an annuity – only at about 4+ times the current returns. Yes, at the end of 20y you no longer get FIT generation payment and have lost your capital layout, but you do continue to make considerable saving on your electricity bills and still get all the hot water you need for free most of the year.

The actual return is difficult to calculate, but 12% is the absolute minimum.

So everything is going to work perfectly for 20 years. Everything in the garden [ or on the roof ] is rosy. No expenses. no fading of output, no smart a==e fiddling with the FIT. Dream on. La de da de da de da

For the majority, yes. None of the electronics have any moving parts. The inverter and panels are guaranteed for 10 years and the panels guaranteed to still produce 80% of their rated output after 25 years. All the other bits and pieces are the same as your normal household electrics. Do you expect the wiring to wear out?

If something as complex as a car with all its moving parts can operate faultlessly for 10 years with only routine servicing, something as simple as solar generation with no moving parts should have few problems.

Life expectancy of panels (the major cost) is now expected to be up to 50 years. There are plenty of solar (PV) farms out there with hundreds of thousands of panels installed, so there’s a good track record of reliability.

All this is fine and the consensus seems to be emerging that the economics are pretty sound. But nobody seems to be mentioning the consideration that this might be the right thing to do as well as the economic thing to do.
This was certainly an important, even the dominant, consideration for my wife and me and I know we are not alone. We should not be shy about saying so. People who are lucky enough to be able to afford these installations are not only helping themselves.

guarantees are all very well but as many people have found out to there cost that a firm goes out of business, or simply changes it’s name and you are left with nothing. We live in that kind of world. Solar panels are a great asset but also a magnet for the fly-by-night ‘entrepreneur’. OK if you have the money to spare but it is a gamble unfortunately.

I agree thst you have to tred carefully with the installers. Track records and recommendations of local companies can be checked on line with the like of Checkatrade.

The long warranties I mentioned above are manufacturers warranties, not installers warranties. My installer was a small local family company, over 220+ Checkatrade recommendations and have been in business for 16 years. They provided a 5y warranty on workmanship – which seems good to me.

People pay £16k and upwards for a decent car that may last 12y and costs a fortune to run. £6k for solar panels looks a bargain by comparison.

Be very careful about the supplier. I had 10 panels fitted in 2011 just before the FIT rate dropped. The fitters seem to have been real cowboys. They broke several roof tiles and I had a lot of trouble with my roof. Make sure that your roof is in suitable condition before you consider having these panels.

In terms of payback, I think that the firm exaggerated the amount that I would get. I am in the process of pursuing a claim in misselling against the supplier.

Yes you do seem to have had your installation done by cowboys. The pre-installation survey should cover the condition of the roof to ensure that it is both a suitable structure to support the panels and that it is in a good state of repair. They certainly should make good anything they accidentally break.

As for exaggerating payback: their estimates should have been calculated using the official government charts that cover your location, slope of roof and direction of roof. These figures should have been given to you. Estimate of payback time is also taken from the same charts. You can use the calculator on the Internet, enter your postcode, direction of roof, slope of roof, estimated shadowing and cost of installation to see the ‘official’ estimated payback.

I find Checkatrade and Which? Local are good for checking out reliability of tradesmen.

My 12 panel 3kW system was only installed three weeks ago for a tadge over £5k, so too early to give an overall view. My (front) roof faces WSW and has a 30deg pitch (no shading). Actual peak generation to date has been 2.9kW, but that drops off considerably when a cloud covers the sun. Best day generated 20kWh, but more typically 15kWh/day (and this is the height of summer). Installation was fairly painless.

I looked at the investment side (including what I could have earned investing the cash). Using the supplier’s figures, the IRR was 14.3% over 20 years (cash payback in 7 years). With my more cautious scenario, the IRR dropped to 12%. I thought that was OK as a a fairly low-risk, long-term investment that will also mitigate the effects of electricity price rises.

My supplier (EvoEnergy) included an insured deposit and warranty.

My wife and I were also concerned with the appearance. Looking at some installations, that may more than offset any property price benefits. I our opinion, the silver aluminium frames with visible silver connections and large silver diamonds between the cells have a rather industrial appearance. Some panel layouts also border on the ridiculous. Fortunately, we were able to have a simple rectangular 4 x 3 panel installation and selected German Solarworld panels, which are largely black panel with a black frame.

The American Sunpower panels are available now up to 327W each (21% efficiency and with very low rates of deterioration) and available in a very cool all black finish. Unfortunately, they have yet to make their way to these shores and are more expensive, but keep a look out for those.

Peggy Semler says:
17 July 2014

We moved into our 1.5 storey house on the Isle of Skye in 2011, and had solar panels installed on our due south facing roof area in the Autumn of that year. We chose a relatively local supplier, but had lots of problems with subcontractors who actually damaged our roof during installation (which was subsequently repaired by our supplier). We chose a 3.75kw Solar Edge system, as each panel can functionally independently and it can all be monitored via a website. It has been up and running since Dec 2011 and to date we have received FIT payments totaling around £3.7k, so we expect them to pay for themselves within about 12 years.
Around the same time that we had the panels installed, we also changed our hot water system to a 190L Thermal (Heat) Store, largely to improve hot water pressure in the upstairs bathroom. This is primarily heated by the back boiler of a multi-fuel stove (to provide central heating to radiators and domestic hot water), but we added the option of also being able to heat it with up to 4 – 3KW immersion heaters as a back up. Earlier this year we purchased and installed a Solar Immersion box, which re-directs any available generated power to one of two of these immersion heaters. So far this summer we have rarely had to put any “bought” power into heating hot water, and have already seen a significant reduction in our latest electricity bill! It will be very interesting to be able to look back later in the year and see just how much of an advantage this is giving us.