Wondering how solar panels work with your electricity bill? Here's what you need to know.
Benefits of Solar Panels on Your Electricity Bill
Reduced Electricity Bills: Installing solar panels will significantly lower your electricity bills by decreasing the amount of energy you need to purchase from the grid. Although your bill won’t detail the exact amount of solar energy you use, you’ll notice a reduction in the overall energy consumption reported by your supplier.
Export Tariff Payments: If you enrol in an export tariff, you can sell any excess energy your solar panels generate back to the grid. These payments will appear on your bill, providing an additional income stream and further reducing your overall electricity costs.
Energy Production Tracking: Most modern solar panel systems come with an app that allows you to track the energy production of your panels in real-time. This feature helps you understand your system’s performance and optimise your energy usage to maximise savings.
Although solar panels come with a significant initial cost, they can save you money in the long run by supplying your home with free, renewable energy, thus reducing your electricity bills.
Understanding Your Solar Energy on Electricity Bills
In this guide, we’ll explain how solar energy impacts your electricity bills, how it modifies your payments, and when you need to inform your energy provider about your solar panels.
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How Do Solar Panels Impact Your Electricity Bill?
Lower Energy Consumption: Solar panels significantly reduce the amount of electricity you need from the grid by generating power from sunlight. This reduction in grid energy consumption is reflected in your lower electricity bills, even though your supplier doesn’t specify the solar energy used each month.
Reduced Bills Without Detailed Explanation: After installing solar panels, your electricity bills will be lower due to the reduced grid energy consumption. However, the bills won’t explain this reduction in detail; you’ll just see a lower total amount, which you can attribute to your solar panels.
Selling Excess Energy: If your solar panels generate more electricity than you use, you can sell this excess back to the grid through a Smart Export Guarantee (SEG) tariff. This scheme allows you to earn money from your surplus energy, further reducing your electricity costs.
Impact of SEG Tariffs: If your electricity provider also offers an SEG tariff, your bill will include a line item showing how much money you’ve earned from exporting extra solar energy. This additional income can significantly enhance your savings.
Average Savings: Households with solar panels typically see a 16% increase in savings by signing up for an SEG tariff, making solar panels an even more attractive investment.
Informing Your Energy Supplier About Solar Panels
When to Notify Your Supplier: You only need to inform your energy supplier about your solar panels if you want to enrol in their SEG tariff. If you choose another company’s export tariff, you only need to notify that specific company.
Distribution Network Operator (DNO) Notification: Your DNO, which manages the electricity distribution infrastructure in your area, needs to be informed about your solar panel installation. This notification helps the DNO manage the electricity network effectively.
Installer’s Responsibility: Your solar panel installer is responsible for notifying the DNO within 28 days of commissioning your installation. Commissioning involves testing and inspecting the system to ensure it operates safely and effectively.
Follow-Up: After the 28-day period, confirm that your installer has sent the necessary paperwork to the DNO. If they haven’t, follow up with them until they do. If your installer is unavailable, you can contact the DNO directly to get your system approved.
Handling Older Installations: If you purchased a property with existing solar panels and the original installer is out of business, you should contact the DNO yourself to ensure the system is correctly approved and integrated into the grid.
Can Solar Panels Cover Your Entire Electricity Bill?
Partial Coverage: While solar panels can significantly reduce your electricity bills, they typically won’t cover the entire amount. For at least half the year, a well-sized solar installation can supply enough electricity for daytime use, but not for nighttime consumption.
Day vs. Night Energy Use: Solar panels generate energy during the day when the sun is shining, but not at night. This means you’ll still need to use grid electricity during nighttime hours, preventing complete coverage of your electricity bill.
Energy Usage Statistics: Most households with solar panels use about 50% of the energy they generate. The rest can be sold back to the grid through an export scheme, potentially cutting your electricity bill by over 60%.
Break-Even Point: Although solar panels may not cover all your electricity costs, they often allow you to break even less than halfway through their lifespan, making them a cost-effective investment in the long run.
Solar Batteries: Adding a solar battery can increase the amount of solar energy you use, but even with the best batteries, you’ll typically only use about 80% of the energy produced. This setup extends your break-even point by about a decade.
Complete Coverage: Achieving complete coverage of your electricity bill with solar panels and batteries is possible but generally not cost-effective due to the high upfront costs of the necessary equipment.
Average Electricity Bill with Solar Panels in the UK
Typical Savings: For a three-bedroom household with a 3.5 kWp solar system, the average annual electricity bill is around £236, representing a 70% saving compared to homes without solar panels.
Detailed Analysis: To understand the full benefits and cost savings of solar panels, refer to our comprehensive guide that explores whether solar panels are worth it in the UK.
Summary
You now understand how solar panels influence your electricity bill. The next step is obtaining quotes for your installation.
FAQs - How Solar Panels Work With Your Electricity Bill
• How do solar panels connect to my house?
Solar panels usually connect to your electricity supply via the roof, leading to an inverter in the loft, which then connects to your consumer unit. Your installer will ensure the system is safely integrated and functioning correctly.
• Can I change energy suppliers with solar panels?
Yes, you can switch suppliers without notifying them, unless you also want their export tariff. Changing suppliers won’t affect your existing export payments unless you choose a new export tariff.
• Why is my electricity bill high despite having solar panels?
If your bill remains high, consider adding more panels or shifting more energy usage to daytime. Running appliances like dishwashers and washing machines during the day can help maximise solar energy usage and reduce your bill.
• How much can I earn by selling electricity back to the grid?
With Octopus Flux for example, you can earn about 24p per kWh, totalling £317 annually for a typical household. Scottish Power’s SmartGen tariff offers 12p per kWh, resulting in £159 per year. The Smart Export Guarantee ensures you receive payments for any renewable energy sent to the grid.
This guide ensures you’re informed about the benefits and considerations of solar panels on your electricity bill. Now, take the next step towards a greener, cost-efficient future by contacting REM for a quote.
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