Solar panel installations on homes 'hit record high'

A record number of homeowners had solar panels installed this month as growing numbers of people and companies look to cash in on the Government's renewable energy scheme, figures showed today.

So far during August, solar panels have been fitted to 2,257 homes, up from 1,700 in July and 1,400 in June, according to energy regulator Ofgem.

Since April, more than 6,688 homes have had solar panels fitted, with these panels cable of generating more than 16MW.

The boom in solar panels has been sparked by a change to the Government's scheme to reward people who generate their own energy.

The feed-in tariff system was introduced on April 1, and enables homeowners to currently receive 41.3p for every unit of energy they generate, regardless of whether they use the energy themselves or sell it back to the National Grid.

The tariff is paid for 25 years after the panels are installed and is increased in line with inflation.

It replaces the previous system under which people could obtain grants to help cover the cost of installing the green technology.

But the change to the scheme has led to a growing number of companies looking to cash in on the generous feed-in tariff.

These firms are offering to install solar panels for homeowners free of charge and let them use the energy generated for free.

But the company retains ownership of the panels and keeps all of the money generated from the feed-in tariff.

The Energy Saving Trust said solar panels typically cost between £6,000 and £12,000 to buy and install, depending on their size, although it said the cost was coming down.

The panels most commonly installed by homeowners, which consist of eight panels able to generate up to 2.5kW, cost around £10,000 to £12,000.

It calculates that panels of this size could generate around £700 a year from the feed-in tariff, as well as saving homeowners around £100 a year on their energy bills.

In addition to this, people could make around £25 to £30 through selling any energy they have not used back to the National Grid.

As a result, if homeowners paid the £12,000 cost of the panels up front, it would take them around 14-and-a-half years to recoup their investment, meaning the remaining £8,715 they would generate through the scheme, in today's prices, would be profit.

The Energy Saving Trust has a cashback calculator on its website to help people work out how much they would be likely to save by installing renewable technology.

The calculator takes into account where people live in the country, as while solar panels run off daylight not sunlight, the more intense the light is, the more energy they generate.

It is estimated that there is a 20% difference between the amount of energy someone living in the north of Scotland could generate from solar panels compared with someone in the South West.

People who are at home during the day, when the energy is generated, are also likely to be able to save more on their fuel bills than people who are out, as they can use electrical appliances such as washing machines or dish washers during this time.

There are not currently any grants available to help cover the cost of buying and installing solar panels, however, there are companies who will install them for free in exchange for keeping the feed-in tariff.

Rob Lewis, renewables strategy manager at the Energy Saving Trust, said for people who could not afford the up-front cost of installing the panels themselves, it was worth considering taking up one of these companies on their offer.

But he added: "If you do decide to go along with one of these offers, make sure you ask the right questions."

These questions include whether you can use the energy you generate for free, or whether you pay a reduced tariff for it, as well as whether the company will pay for all of the equipment needed or just the solar panels themselves and if they will be responsible for maintenance.

If you can use the energy for free you are likely to save around £100 a year, but the trust warns that if you have to buy it at a reduced rate the benefits to you are likely to be "very minimal".

Other issues that people should explore include who will pay for any damage to the equipment or the property as a result of the panels being installed, what happens to the panels at the end of the 25-year period and what would happen if you sold the property.

In most cases, if a property is sold, the company would require the new homeowner to continue with the agreement until the end of the 25-year term, and there have been anecdotal reports of this holding up house sales.

The trust adds that companies are only likely to install panels for free on south, south-west or south-east facing roofs.

Companies offering the panels should be certified by the Microgeneration Certification Scheme.