UK households see solar panels pay for themselves 2.5 years faster following Ofgem’s April 2022 price cap rise.
Sky-high fuel prices mean homeowners look up to make savings - increased demand for solar installations driven by energy price hike and reduced time to pay back investment.
Research from cleantech platform MakeMyHouseGreen.com shows the average time for solar panels to pay for themselves has reduced by 2.5 years since the April price cap hike.
Projected monthly savings from solar installations have increased by 27% since the new price cap was introduced, with a significant impact on the cost efficiency of home solar. And it’s only set to increase in October with the next price cap predicted to push prices even higher.
For those lucky enough to have the cash to invest, solar panels are looking increasingly attractive as a means of saving money every month. The cost savings are immediate - as soon as the system is installed, it starts generating green electricity at no cost to the homeowner.
MakeMyHouseGreen.com provides accurate predictions of the amount of cash and carbon homeowners can make by installing green home tech solutions, which formed the basis for this piece of research, that looks at the increase in savings from earlier in 2022 compared to now.
The results show that those solar installations which took place in recent weeks have already seen homeowners save far more than was predicted under the old price cap. One MakeMyHouseGreen customer in Bournemouth had 8 panels installed on her South East facing roof along with a battery storage system - her annual savings were predicted to be £619 per year but are now £847 per year. This has reduced the time for the system to pay for itself by over 3 years (1).
Of the installations sampled, fewer than 10% saw a payback time decrease of less than 6 months, most saw an improvement of over 2 years and the overall average was 2 years 6 months.
The huge increase in the cost of energy, in addition to consumers’ desires to go green, has led record numbers of UK households to consider investing in solar panels. However, there is a lack of practical and unbiased information available on how to do it.
Llewellyn Kinch, co-founder of Switchd and MakeMyHouseGreen, says “It’s difficult for homeowners to get an accurate understanding of how much they can really save from retrofitting solar panels without access to expert guidance. Our data-driven model solves this by providing an accurate picture of the costs and savings for your home and energy.”
With the price cap set to rise even further, amplifying the cost of living crisis, more and more households are predicted to take their energy generation into their own hands. This won’t only have implications on cash, but on carbon as well.
Kinch continues “The energy crisis has shown that it’s never been more important for the UK to invest in renewables. Every kilowatt hour (kWh) of electricity generated by home solar is a kWh that doesn’t have to come from expensive and polluting power stations. In 2021, over 3gW (2) of electricity was produced by UK home solar panels - a record that will be broken in 2022, as demand for installations rises further.”
Another record certain to be broken this year is the number of new domestic solar installations. The previous record was set last year but most installers are now reporting record demand. As soon as the October price cap is announced, we expect to see payback times come down even further, stimulating even more demand.
(1) MakeMyHouseGreen compared savings costs based on customers’ home energy tariffs pre-price cap rise and post-price cap rise. The saving calculation is based on a 10 year average saving and includes an annual multiplier of 3.4% for inflation
(2) “Annual UK solar PV installations hit output milestone”, MCS, 21 March, 2022. https://mcscertified.com/annual-uk-solar-pv-installations-hit-output-milestone/