Energy firm now offers a solar panel loan to homeowners with green ambitions

Households installing solar panels can now get a loan from an energy firm to help them with the massive upfront costs.

Scottish Power will provide consumer finance for those who want to install solar panels, or a battery to store their solar energy.

Costing between £9,000 and £13,000 on average, for many households the price of solar panels is a huge barrier.

Scottish Power, meanwhile, has said the repayments on its loans could be as little as £132 per month for some households. 

We look at the terms of the deal and whether it’s a good idea to take out a loan to make your home greener.  

Shiny offer: Scottish Power has launched a consumer finance plan to help homeowners cover the upfront cost of installing solar panels or a storage battery

Scottish Power’s financing plan will allow households to buy and install their solar systems with no deposit and no VAT.

Customers can either pay in full, or spread the cost over three to five years of monthly payments, which start from £132.45 per month.

That amount is based on a six panel on-roof system on a concrete-tiled roof, with no complexities such as installing above a conservatory or digging trenching required for electrics.

In total it would cost £6,050 upfront for an installation of this type. But with a fixed interest rate of 11.9 per cent, the total amount repayable would be £7,947 – of which £1,897 would be interest – over 60 monthly instalments of £132.45.

Is it cheaper to have fewer solar panels? 

Solar panels capture energy from daylight and turn it into electricity that can be used to power households.

Scottish Power said the more panels a customer has, the more electricity they can generate to make their home more efficient.

According to GB Solar, the price of a solar panel system doesn’t correlate directly to the volume of panels you install.

The cost to scaffold a property will often be the same whether you’re having eight or up to 20 panels installed, for example.

So whilst you’ll pay more for more panels, you’re spreading the cost of that larger system across the same cost base.

The capacity of the panels also influences the price. A 3kW solar panel installation on a typical roof that requires scaffolding might cost in the region of £5,000.

A 6kW solar panel system on the same roof with the same scaffolding and administration costs, might cost in the region of £7,500.

So, for an extra £2,500, you could double the capacity of your solar panel installation from the start.

How much does a storage battery cost? 

A storage battery lets you store the energy your solar panels produce. 

Typically, a household will waste 50 per cent of the electricity produced by solar panels according to the Eco Experts.

With a battery installed, you can use all the extra solar energy captured during the day that you didn’t use.

This means you can keep the energy you’ve generated and use it exactly when you need it most – or sell it back to the grid – instead of it going to waste.

Battery storage is an expensive addition to a solar panel system, but it can make a real difference to savings on your energy bill.

The Eco Experts put the average price for a battery storage system at £4,500. But the amount you pay will depend on the size of the battery.

The larger the solar panel system, the larger the battery you’ll need.

According to GB solar, the cost for a typical 4kWp capacity solar panel only system (without battery) is normally between £5,000 to £6,000.

With a battery that price can then vary from between £9,000 to £13,000.

How much could I save with a battery storage unit
Battery size  Annual savings
4 kWh £469.79 
8 kWh   £782.99 
9.5 kWh £1,096.19 
Source: The Eco Experts

How much could I save with a battery?

The average three-bedroom house with solar panels will generate 2,645 kWh of electricity per year.

This will save you £608 on your energy bills, made up of £450 you won’t have to pay the National Grid, and £158 you can get by selling your excess power, according to the Eco Experts. 

It is much more cost effective for you to use the energy you’ve generated than it is to send it back to the grid for a payment. You’ll only receive a maximum of 15p per kWh when selling energy back.

At 34p per kWh, electricity is more expensive than what you’d get via the Smart Export Guarnatee (SEG) initiative, so you’ll save money if you simply store your excess energy in your solar battery for later.

On a bright day, your solar panel system could be powering your home whilst you’re away from it, and when you come home you’ll have a full battery to power you through the evening, night, and sometimes into the following day.

So if you are not home during peak sunshine hours, a storage battery could be worth it.

Be aware that not all energy suppliers allow you to export stored energy, however.

One of our readers told us: ‘I sell my excess back to the grid for 24.91p per kWh.

‘If you don’t have a battery, with my supplier you only get 4p per KWh for 50 per cent of any excess you generate.’

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