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Solar technology has come a long way from being something that was once only reserved for commercial use to now being easily accessible for residential users.
This lower trend can be attributed to advancements in solar technology, material science, and of course, the incentives provided by governments.
Government incentives aren’t anything to brush off! If you do the math, you will realise that you can save quite a lot of money in terms of direct monetary incentives and even tax breaks by going the solar route.
Countries are now moving towards solar energy and with climate change on the rise, the time is now for us to adopt a cleaner, safer, and more efficient way of generating electricity.
Read below to learn more about how solar energy incentives and tax benefits can make solar installations more feasible for homeowners.
If you calculate the per-watt cost for a typical solar installation and compare it to previous years, you will come to find that there is a steady downward trend in costs.
Check out the below table to understand how solar energy has become more feasible over the years:
| Year | Median installed price of a residential solar panel system (GBP/W) |
| 2011 | £5.03 |
| 2012 | £4.18 |
| 2013 | £3.64 |
| 2014 | £3.17 |
| 2015 | £3.29 |
| 2016 | £3.55 |
| 2017 | £3.60 |
| 2018 | £3.28 |
| 2019 | £3.37 |
| 2020 | £3.40 |
| 2021 | £3.12 |
| 2022 | £3.25 |
| 2023 | £3.19 (estimated) |
| 2024 | £3.13 (estimated) |
This trend is likely to continue as more and more people begin to adopt solar energy. So now is as good a time as any to jump in and enjoy the short- and long-term benefits of installing solar panels for your home!
Homeowners in the UK can take advantage of several monetary incentives and benefits to make their solar installations more feasible. Here are some of the ways you can make the most out of them:
The Smart Export Guarantee is an excellent scheme that allows homeowners to sell excess energy back to the grid. This scheme can enable net metering for eligible solar installations.
This means that when your solar system generates more energy than can be used by your home and stored in the battery, you can sell that energy back and earn credit on your electricity bill. Keep in mind that different suppliers will offer different rates, so it’s best to check out your local power company to learn more about the rates that they offer.
Zero VAT on Solar Panels:
As of April 2023, the UK government has reduced the Value Added Tax rate on solar installations to zero. That’s right, instead of paying a hefty VAT price on the installation, you can now purchase solar equipment with virtually no added VAT. This is an excellent incentive and is a step in the right direction for producing greener energy in the country.
Now homeowners can shave off a significant amount on their solar installations and rack up the savings by applying for an SEG.
Green Deal:
As of 2024, the Green Deal is unfortunately unavailable. However, we are mentioning this scheme because some financing options are still available based on the Green Deal model.
Private companies are jumping in on the action and providing easy loans that allow homeowners to switch to solar more feasibly. Some companies also offer the benefit of paying back the loan in the savings you make on your electricity bill.
Local Grants and Incentives:
Local councils recognise the importance and appeal of switching to solar energy which is why some local councils are offering additional grants to homeowners to make solar installations more feasible.
These grants can vary greatly depending on where you live so we recommend that you check in with your local council to see if any options can make your installation more affordable.
Solar energy has a lot of other monetary benefits as well. These benefits can make your installation more worthwhile in the long run. For example, the immediate benefit of installing a solar system at your home is a reduction in electricity bills.
Solar systems are not only better for the environment, but they can also make your property more lucrative. Properties that have an adequate solar system installed typically see an increase in the overall property value. This is because renewable energy is trending and highly attractive for the modern homeowner. So, installing a solar system can not only benefit you in the short term but can also potentially help you increase your home’s value!
Here are some of the ways you can maximise your incentives and benefits for solar installations:
This is why we recommend that you research SEG tariffs and speak to your local power company to understand their schedule of charges and rates for purchasing electricity.
A properly installed system is designed to run for over two decades – that’s about the warranty of a typical high-quality solar panel! If you skimp on the installation and go for the DIY or freelancer approach, then you will almost always end up losing money down the road.
Please keep in mind that solar installations require optimisation, and the system itself must be installed using all the industry standards to ensure its longevity.
Furthermore, solar systems also require periodic maintenance and monitoring to ensure that it is running at maximum efficiency throughout the year. These benefits and peace of mind can only be achieved by going with a professional installation company.
Before we talk about the cost of residential solar panels and their ROI, let’s discuss the broad benefits of installing a solar system for your home:
Energy prices are soaring high due to inflation, generation costs, and market demand. With fluctuating costs, it has become apparent that solar energy is the primary way forward if you want to save money on your electricity bill.
Solar systems are designed to maximise the capture of solar radiation. So, a properly installed system by a professional company will guarantee savings on your electricity bill.
The best thing about solar energy is that you can generate as much as you want so long as there is ample sunlight. So, if you live in a very sunny area, then chances are that you will likely end up generating more energy than you can use. Some of this energy can be saved on batteries and the excess can be sold back to the grid.
In fact, once the solar batteries are at full charge, you can sell back all excess energy and steadily increase your monetary benefits. This benefit can be even more apparent during colder seasons when you don’t need to spend that much energy on appliances.
Solar energy is clean and green. This eco-friendly method of generating electricity not only has monetary benefits but can also benefit the environment. By not relying on fossil fuels to generate electricity, you can potentially reduce your carbon footprint.
With the right installation, you can even reduce the carbon footprint of your home to zero! This is a big win for the environment and a win-win for homeowners.
Integrating solar batteries with your solar power system can allow you to rely less on the grid. Even during storms or blackouts, you can power your home using stored energy and not rely on the grid which may provide fluctuating currents during weather conditions.
Solar technology has no moving or mechanical parts. This makes it highly reliable. Additionally, professionally installed solar systems have several fail-safes and redundant security components that can protect the system and increase its longevity.
When you install a solar system at your home, your installation company might offer a maintenance contract. Companies like Calder Electrical offer a thorough maintenance contract where a trained technician can periodically visit your home to inspect and monitor the system. The technician will also periodically clean the panels so that they don’t have any debris or dirt on them.
Solar panels require very little maintenance – so little that even a bit of rain can clean the panels and increase their performance!
Solar systems are highly versatile and can be installed in any area that sees a lot of sunlight. This can either be rooftops or a secluded area on your property. Installing solar panels on the roof of your property might be particularly beneficial since the panels will be installed on an extended frame.
The frame can act as a secondary roof and capture the heat and sunlight, essentially acting as an insulator and keeping your home cool. Furthermore, the panels can also protect your home from water damage during heavy rain and can keep your roof clean and clear!
Hybrid or smart solar systems are on the rise due to their added convenience. These systems are designed to capture and distribute energy using advanced computer algorithms and even Artificial Intelligence. These smart systems can be monitored remotely and since they are connected to the internet, homeowners can see the energy data in real time on their phones.
This way, even if you are not at your home, you can easily access the settings of the solar system and adjust them on the go.
The exact cost of any solar system will depend on the number of panels, the capacity of the battery, and the total size of the project.
A typical 250W solar panel can cost around £400 to £500 on average. Most homes can get by with about 4kW which would bring the approximate cost to around £6,400 and cover around 29 square metres of your rooftop.
Please keep in mind that there are a lot of complexities involved with the costs of solar systems. This is why we recommend that you talk to a professional installation company like Calder Electrical to figure out an approximate for your needs.
Additionally, not all solar systems will provide the same monetary benefits. For example, a 3kW system may seem like a cheaper way to get on the solar trend, but this system will not allow you to save as much as a 6kW system would over the course of 25 years.
How?
Well, if you do the math, you will conclude that a 6kW solar panel system will likely start to show returns on investment after 6 to 7 years, whereas a 3kW system may take much longer than that making it a less viable long-term solution.
With a typical home installation, the electricity generated by solar panels can result in annual savings of up to £1,460+. Keep in mind that these savings will likely rack up over the years since you will be constantly selling back excess energy at different rates throughout different seasons. So, in 25 years you could see more than £40,325+ in savings depending on your system and tariff.
As mentioned above, due to the several grants and financing options available for these installations, you can make the ROI for the installation even more feasible. So, by going with all the mentioned tax and monetary benefits available, you can significantly cut down the ROI and earn back the initial installation cost within a few years!
It is important to understand that solar installations are a long-term investment so you shouldn’t be discouraged by the total initial cost of the installation.
This is why professional companies like Calder Electrical guide you through the process and show you how you can earn back your initial investment within a reasonable time frame. When you understand the math and logic behind the SEG scheme, you will begin to realise how feasible these systems can be over the long term.
In the UK, the typical return length for solar panels is around 10 years. However, depending on the size and type of system, the energy consumption, and export tariffs, the costs can be paid off within 7 years. As a comparison, the total life of good-quality solar panels is more than 25 years!
Calder Electrical Services provides a wide range of solutions to help you play your part in making the world a more sustainable place.
If you wish to have solar panels installed on your residential or commercial property, our experts can conduct a site visit to determine your requirements and propose the best type of solar system for your needs.
We also offer solar battery storage installation so that you can minimise any wastage of the energy you create. This will help lower your energy bills and make you more independent from the grid.
We have been providing electrical services to residential, commercial, and industrial properties for over 40 years and are specialists in all aspects of electrical installations, maintenance, and testing.
All our work is fully insured and meets the current regulations and standards set by the NICEIC. Also, all the notifiable work is signed off by the local authorities.
Contact us here or call us at 0800 612 3001 to get in touch with our professional electricians for more information on solar energy incentives and tax benefits for homeowners.
