How to pay for solar panels?

Solar panels have become a popular option for households in the United Kingdom looking to reduce their carbon footprint and energy bills. However, the cost of installation can be a deterrent for some, leading to the question of how to pay for solar panels. In this article, we will explore the different payment options available for solar panels in the UK.

1. Outright purchase

The most straightforward option is to pay for solar panels upfront with cash or through financing. This option allows homeowners to own the solar panels outright and benefit from the energy savings and potential income from the feed-in tariff. The cost of solar panels can vary depending on the size of the installation and the type of panels used, with an average cost of £6,000-£7,000 for a 4kWp system.

2. Finance options

For those who do not have the funds to pay for solar panels upfront, there are various finance options available. Many solar panel companies offer financing solutions, such as loans or leasing options, which can spread the cost of installation over a longer period. This option allows homeowners to benefit from the energy savings and income from the feed-in tariff without a large upfront cost.

Another option is to take out a green loan or mortgage, which is specifically designed for energy-efficient home improvements. These loans can offer lower interest rates and longer repayment periods than traditional loans, making them an attractive option for those looking to install solar panels.

3. Feed-in tariff

The UK government introduced the feed-in tariff in 2010 to encourage the uptake of renewable energy technologies, including solar panels. The feed-in tariff pays homeowners for the energy they generate from their solar panels, as well as any surplus energy they export to the grid. This income can help offset the cost of installation and can provide a return on investment over time.

However, the feed-in tariff scheme closed to new applicants in 2019, meaning homeowners who install solar panels now will not be eligible for the scheme. Instead, they will be able to benefit from the Smart Export Guarantee (SEG), which requires energy suppliers to pay for surplus energy exported to the grid.

4. Community schemes

Community schemes are becoming an increasingly popular option for those looking to install solar panels. These schemes involve a group of homeowners coming together to fund a solar panel installation, which is then shared among the group. This option can reduce the cost of installation, and homeowners can benefit from the energy savings and income from the feed-in tariff.

5. Grants

There are currently no government grants available for solar panel installation in the UK. However, some local councils and charities offer funding for energy-efficient home improvements, including solar panels. Homeowners can check with their local council or search for grants and schemes online.

In conclusion, there are various payment options available for homeowners looking to install solar panels in the UK. The best option will depend on individual circumstances, including budget, energy usage, and available finance options. However, with the potential energy savings and income from the feed-in tariff, solar panels can be a worthwhile investment for homeowners looking to reduce their carbon footprint and energy bills.