Circumvent the energy crisis with solar

In February of this year, it was announced that the price cap, that was put in place to stop energy companies from charging an extortionate rate, was going to rise by a staggering 54%. This left many people worried about how they would be able to afford energy to heat their homes, and as a result, consumers have been turning to solar energy as a way of circumventing the energy crisis. On the face of it, investing in solar energy is a promising idea, but for those who have had panels installed, or for those that are contemplating a solar installation, is it realistic that having solar panels will help avoid the ever-rising energy costs?

Energy bills and the Grid

The vast majority of households in the UK are reliant on the National Grid to supply them with their energy. The National Grid states that they “play a vital role in connecting millions of people to the energy they use”, and they are the largest electricity transmission service in the UK. After the electricity has been generated, it falls in to the hands of DNOs (Distribution Network Operators) to supply the electricity to homes and businesses, with energy suppliers charging users for the amount of energy they use. The recent price hikes have meant that pretty much all energy suppliers have upped their costs, and while there is still competition between who can provide the best deals, it has become a lot harder for consumers to make any distinction between them, as the prices have gone up astronomically.

The UK government have laid out a strategy that looks to increase reliance on renewable energy like solar and wind power, which could see 95% of energy being low carbon by the year 2030. Of course, this is great for the environment, but does this really have much of an effect on current energy prices? Thanks to the constant energy price hikes, not really, but consumers can step away from the idea of being fully reliant on the Grid, and turn to the most popular form of renewable energy there currently is, solar.

How can going solar reduce costs?

Since the start of the energy crisis, people have been turning to solar panels to supply their homes with electricity. One of the main reasons why they are becoming such a common choice for consumers is their ability to help you become more independent from the Grid. This can be especially useful at ‘peak times’, where energy prices temporarily become more expensive per unit. While having solar panels alone is unlikely to make you completely independent from the Grid, they certainly help when it comes to keeping costs down.

There was a government incentive called the Feed-in Tariff (FIT) that allowed those with solar panels to export any excess electricity that they had made, back to the Grid. Unfortunately, this scheme ended in 2019, but it was replaced with the SEG tariff, which is government backed, and is essentially the same thing, but with energy suppliers paying for the electricity instead of the Government. This is an added bonus as it means that you can save money on soaring energy bills, and make some money back, and as a result, the return on investment is much quicker.

In the event that someone wanted to keep all of the energy that they had generated, batteries can be installed as a kind of back up, meaning that when the panels aren’t working at complete efficiency (like at night), there is still an energy reserve waiting to be used. This allows consumers to be even more independent from the Grid, and is a great idea for those who want to cut costs even further.

The pros and cons of going solar

We may be a little biased when it comes to answering if people should switch to solar energy, of course, we think everyone should, but it’s important to weigh up the pros and cons to see if going solar in the midst of an energy crisis is the right step.

Pros

• Control spending: having solar panels allows consumers to have far more control over the amount of energy they use, and the amount of money that they are spending on it. Using solar panels means you can more effectively monitor the energy created and how much is being used, making it far easier to understand usage habits and change them if need be. Not only this, but it becomes far easier to avoid ‘peak time’ charges when you are creating and supplying your own energy
• Earning through the SEG tariff: with energy suppliers vying for who will pay the best rate, it is in the hands of the consumer who they want to export their extra electricity to. While suppliers all charge different rates, consumers can choose the best deal and benefit from earning a little extra cash.
• Return on investment: having solar panels installed is great for the long-term benefits as well as the short-term benefits. Through the money that is saved on conventional energy bills, coupled with the SEG scheme, users can expect to see a far quicker return on investment than in previous years, this is also down to the cost of energy being so high at the moment.

Cons

• Not a constant power source: it doesn’t take a genius to realise that solar panels aren’t generating electricity at night, and this isn’t particularly useful for those wanting to be independent from the Grid. The best way to mitigate this issue is to invest in a solar battery as well as the panels, so extra energy can be stored.
• SEG payments are low: it’s predicted that electricity costs will be 51p/kWh by the end of 2022, and while the SEG tariff is great to earn some passive income, energy suppliers are not incentivising it as they should. Suppliers are offering anything between 1p/kWh and 15p/kWh, which is not great when compared to the current costs.
• High upfront cost: while solar panels have become far more affordable in recent years, they are still a costly investment to make. Lower income families are going to be most affected by this crisis, and it’s not realistic to assume they will have spare cash ready to invest in a solar system. Adding on a battery will also increase the price, which makes self-sustainability even further out of reach for those who can’t afford it.

What’s the takeaway?

There are so many advantages for choosing solar power to supply your home with energy. Ultimately, it’s up to the consumer to weigh up the pros and cons to decide if going solar is the right choice for them, but we’d argue that the pros outweigh the cons. It’s important to think of solar energy as a long-term solution – yes energy bills are high now, but they could rise even further in the future. Relying on solar energy instead of the Grid would mean that those fears can be somewhat avoided. Not only this, but the cost of solar panels and installation is cheaper than it has been in a long time, so it makes sense to take advantage of this before companies start to capitalise on high demand in future. Overall, solar panels can play a huge part in lowering current energy bills, really aiding in circumventing the energy crisis.