Is getting Solar Panels still worth it?

In addition to the financial aspect, there are many other environmental benefits to be gained from installing solar, installing battery storage, driving an electric vehicle etc., because they all contribute directly or indirectly to tackling air pollution and the climate crisis.

The solar subsidy may have fallen but that has been balanced by the cost of an installation. The cost of domestic solar electricity in 2024 is between 22p and 25p per kWh and the Export payment is between 2p and 27p. Needless to say, in order order to get the best deals, there are various terms and conditions that are applicable.

The economics of solar since 2024

As of August 2024, a set of 10 solar panels could be installed for around £7,250 which would suit an average three-bedroom house. This of course is a very rough guide, because other installation factors need to be taken into account; such as roof access, the type of roof, as well as the amount of cabling required, which is determined by the location of the equipment.

The savings/profit you would make over the lifetime of the system would also depend on a number of factors, such as the electricity usage pattern of the household; shading on the panels; orientation of the roof and even in which part of the country the property is located. So for example, the figures generated in Dundee would be different from those in Glasgow.

As things stand, you are reliant on someone else (your utility Company) to use their power generator to supply you with electricity. By creating your own power generator (solar panels) you are in essence becoming your own Utility Company. It means that each and every unit of electricity you produce with your generator, is one less unit that you are forced to buy from the outside Company. Peak electricity is currently running at about 27p per unit and it is estimated that over the next quarter century, it will average about 47p per unit. So by reducing the number of units that you buy over the years, you will be substantially reducing your household expenditure.

Of course, the usage pattern of the household is an important factor when it comes to crunching the numbers. So there will be some difference between a house where no one is at home for much of the day, compared with one where someone is at home for most of the day. Other things like when things like washing machines, tumble dryers and ironing are done will determine the ‘self-consumption’ figure in the calculations. Generally though, a typical user may well use only about 50-70% of the electricity that their system generates.

This means that the excess electricity is exported to the utility Company of your choosing so they can sell that power to another user. So, in a way, you have become like another utility firm; generating and selling electricity. The firm to whom you sell, will pay you an amount per unit and in 2024, that is varying between 2p and 26p per unit, depending on the Company you choose and the conditions to which you are willing to agree.

Having said that, another factor needs to be brought into the equation. Some people are of the opinion that any electricity you are not using immediately, should be diverted to doing things like heating the hot-water tank for instance; as it is in effect ‘free’ electricity.

However, depending on which utility firm you decide to tie into and the tariff that they agree, it might actually be more cost effective to sell that free electricity to them in the daytime at a high rate and buy it back from them in the much cheaper ‘off-peak’ rate at nights to charge up your battery, so that power could be used the next day when your solar power may not be as much as you need.

Power Trading & Optimisation

Such things can be properly organised and orchestrated by the new generation of intelligent battery/inverters that are now available on the market.

The new leader of that pack is an energy controller called Levelife. There are a number of other controllers offered by different battery and inverter manufacturers as well as those offered by energy providers. Where Levelife is different is that it is not tied to any particular energy source, so its Grid Trading is independent meaning that the consumer who has one of their hubs installed knows that they are getting the best trading deal at the time.

Levelife takes battery storage to the next level by ensuring it operates efficiently and effectively, tailored to the home’s energy needs. By syncing with time-of-use energy tariffs, the Hub ensures you buy electricity at the cheapest rates and use stored energy when prices peak.

The Levelise Hub enables homeowners to participate in energy trading and flexibility markets by aggregating energy storage across millions of homes, generating additional annual revenue. Optimisation not only extends the life of your battery but also maximises your energy savings. With the Levelise Hub, batteries work smarter, not harder, delivering better performance and longevity and at 2024 prices, it is calculated that having one of their hubs on your solar system, could generate an additional £500 of savings/profit annually for  you.

The ‘Break-Even’ point

There is no universal break-even point that applies to all systems. There are so many factors and variances between installations and equipment, that even two houses in the same street could see very different outcomes. The important thing is to remember that the future can only be modelled, not predicted.

Whatever numbers appear on any quotation are a calculated opinion by a piece of software and should be treated as such and not seen any cast iron guarantee.

From the point of view of using panels as a pure investment, the Internal Rate of Return (IRR%), tax free and index-linked from an investment in a solar system over its guaranteed life would be much better when compared with other types of investments; the only risk you are running is whether the sun continues to rise each day.