How Solar Panels Can Reduce Energy Bills on Buy-to-Let Investments

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Solar Panels Gaining Traction in UK Homes

In the UK, solar panels are not compulsory for new homes. However, there is a requirement to incorporate energy-saving measures, and one of the more common methods that property developers use to comply with this is installing solar panels.

The current cost-of-living crisis has intensified the need to cut energy bills, and more people are turning to renewable energy sources to save on their bills.

Let’s see how this affects property investment in 2024.

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The Benefits of Installing Solar Panels

Solar PV is short for Solar Photovoltaic, as Solar Panels form part of a Photovoltaic System. This system includes Solar Panels containing PV cells and an inverter. The Solar Panels absorb solar energy and induce an electric charge, which creates a direct current (DC). This direct electrical current then passes through the Inverter, which converts it into alternating current (AC). This is necessary as household appliances run off alternating current.

In addition to cutting energy bills, PV solar panels offer several other significant benefits.

Solar panels can reduce your carbon footprint by generating clean, renewable energy, thereby decreasing your reliance on fossil fuels. At the same time, they can provide energy independence, allowing you to produce electricity and reduce grid dependence. This not only enhances energy security but can also protect against rising energy costs in the future.

The MCS (Microgeneration Certification Scheme) reported that Solar PV is currently the most popular renewable energy technology. In 2023, there were over 183,000 Solar PV installations across the UK, over 50,000 more than the previous year.

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Liverpool Residents Embrace Solar Power with Group Buying Scheme

The Liverpool City Region and surrounding areas have created a group-buying scheme called Solar Together to enable residents to have solar panels and battery storage in their homes to help reduce energy costs and emissions. The scheme offers homeowners a reduction of around 26% off the installation costs, and the scheme, which launched in August 2022, had nearly 8,000 residents register an interest within the first three months.

As energy efficiency becomes more prevalent, it will likely impact the property sector considerably. Property developers in Liverpool, for example, have already started prominently incorporating eco-technology into designs. New-build properties such as Maritime View will be powered by several innovative, low-carbon technologies (including PV Array Solar Panels) that will help reduce energy wastage and overall carbon footprint.

Further Reading: Discover the best buy-to-let areas in Liverpool and explore alternative property investment types with our expansive starter guides!

How Much Can Solar Panels Save You On Your Energy Costs?

If you generate electricity through a renewable energy source like solar panels, you can benefit from Smart Export Guarantee (SEG) tariffs. These are available throughout the UK, with the exception of Northern Ireland, and rates will vary depending on your energy supplier. There are fixed or variable rates. Fixed rates mean you will be paid a set rate for the duration of your contract, and variable rates mean this rate will fluctuate depending on market demand.

According to Ofgem, if you currently receive Feed-in-Tariff (FIT) payments, you will not be eligible for an SEG tariff until your contract ends. As the FIT scheme is no longer accepting new applications, an SEG tariff is the only current option available. However, alternatives could be available from your energy supplier and can involve monitoring your supply and generation. These can often be for a limited period of time.

The amount of money you can expect back varies between 1 and 24 pence per Kilowatt hour (kWh), depending on the tariff you choose. If you are using less electricity than you generate, this can be very beneficial; however, if you use more than you generate, it may not be as worthwhile.

Further information on property investment and new-build properties can be found in our 2024 buy-to-let Guides:

Author

Mark Greenham

Mark is a property news and onsite content writer at RWinvest. With a close eye on the UK property market, Mark helps our readers stay up-to-date with the property trends and statistics.