Are you curious about solar panels? Government grants are being cut at the end of December, so now might be the time to act. But will solar panels really cut your electricity bills, how much do they cost, and what’s the time frame for payback?
The key question, of course, for anyone considering the investment is how much will solar panels cut your electricity bills? How long is a piece of string? Some households will save more than others, depending on your panels, their aspect and how you live.
You could use an online calculator with your own details to do the sums. With the calculator from AirPV, a platform that partners with the Irish Solar Energy Association, you can enter your Eircode to estimate the likely solar energy in your area, the electricity savings, the payback time and even carbon offsetting.
Take a notional Siobhán who lives in Dublin 18, for example. She’s got south-facing solar panels on her Cabinteely home, producing 5kWp – that’s kilowatt peak, which means the amount of energy a panel can produce at its peak performance, such as in the afternoon of a clear, sunny day.
She works from home and has bimonthly electricity bills averaging €240 to €300. The panels will cost her €6,400 after the Sustainable Energy Authority of Ireland (SEAI) grant, which at the current rate is €2100.
Over a year, Siobhán will save €1,279 on her electricity bills, according to the AirPV calculator. This comprises €580 a year worth of free solar electricity used at home and €699 sold back to the grid. That’s based on day-rate electricity costing her 36 cent a kilowatt hour (kWh) and with the grid buying electricity back from her at 19.5 cent/kWh. Electric Ireland’s decision to cut the microgeneration export tariff rate it pays for power sold back to the network from domestic solar panels through the rate from 21 cent/kWh to 19.5 cent from the start of this month – matching the rate available from SSE Airtricity – will cost her €54 in savings each year.
It will take Siobhán five years to recover the cost of the panels in savings, according to the calculator. Moving to solar will mean carbon dioxide reductions equal to planting 69 trees a year. The calculator also gives the predicted solar power generation of 5,197kWh a year, rising from March to peak in May before dropping to its lowest in December.
If Siobhán were to go with Energia rather than Electric Ireland or SSE, she would get €860, as it currently offers a higher microgeneration tariff of 24 cent/kWh. That would bring her annual saving to €1,440 and save her more thanr six months on her payback time.
“The average homeowner is getting about 10 panels. The cost of that, plus a hybrid inverter and your Ber certificate, is between €7,500 and €8,000, before the grant,” says Conor Walsh of SEAI-registered installer, Encon.
Savings on bills
How much can you save on bills? “It all comes down to your household,” says Walsh. “How many people are in the house? Do you use more electricity at night or during the day? Do you have electric showers? Do you have a heat pump?” he says.
If you work from home and use electricity throughout the day, if your house is heated by an electric heat pump, or you’re currently on a high daytime tariff, you may save more on your bills.
The average household usage is about 4,500kW to 4,800kW of electricity a year, while someone using a heat pump could use between 7,500kW and 12,000kW, says Walsh. Installing solar will certainly reduce the cost of that, he says.
The hybrid inverter is the bit that will enable you to sell electricity back to the grid. It also means you can add a storage battery later if you want to save power generated during the day for use later in the evening when electricity usage is at its peak.
If you are at home a lot during the day, however, you don’t need to get a battery straight away, says Walsh, because you will be using a lot of the energy you are producing. Those working from home can plan to do their laundry, cooking and dishwashing throughout the day.
“In winter, solar is not as effective, so it averages about a five- or six-year payback.,” says Walsh. “Generally it will take five to six years to get yourself to a place where you are almost positive on your bills.”
Co Wexford homeowner Barry Glynn pays nothing for electricity between March and October. He has an impressive 20 solar panel, 7kW system on the southeast facing roof of his bungalow, which was installed by Clover Energy Systems. He has also installed a battery that stores 10kW of power.
Before installing the panels in 2019, Glynn’s two-person household had electricity bills of €170-€190 every two months. Now he has free electricity for eight months of the year.
“The panels are generating a bit in winter but it’s not going to run your world,” says Glynn. “You’ll probably get 25 per cent of your production, maybe less, during the winter months. It’s at this time of year that the battery really comes into its own.”
A 5kWh battery will cost between €1,600 and €2,000, says Walsh. He recommends 10kW as the minimum size.
“You are trying to build a solar PV system for 365 days of the year and, to do that, the battery is vital. The battery takes over when the generation is poor.”
In winter, Glynn charges the battery from the grid at a low overnight rate of eight cent per kW from Energia, and uses this low cost electricity to run his house the next day.
“I’m running about 95 per cent night rate electricity, charging my battery overnight using what Energia calls their ‘EV rate’, and my 10kW battery gets me through the entire next day,” he says.
“From March, coming into the summer months, solar generation is starting to take over again, so I stop buying from the grid at that point and let the solar panels fill the battery as the day goes on,” says Glynn.
“When the solar energy is coming into your house, the house has priority: when the house load is fully used up, the energy goes to the battery. Then when the battery is full, it goes to what’s called a water diverter – that heats your immersion tank, and when that’s complete, you sell your energy back to the grid,” says Glynn.
Don’t base your cost/benefit calculations on selling electricity back to the grid, he advises, treat it as a bonus.
While Energia is currently offering residential customers a rate of 24c per kWh exported to the grid as against the 19.5 cent from Electric Ireland and SSE, rates with all companies will go up and down over time.
“In summer, it’s ‘make hay while the sun shines’: you are making credit while the sun shines. Sell it to the grid to keep you in credit during the winter,” Glynn says.
His house is heated using oil and a wood burner. “The oil boiler takes the summer off because solar creates so much energy, it is heating the hot water tank and the boiler is not required. That means we are saving on oil,” says Glynn.
Grants
The maximum grant for solar panels is €2100, but that is only available until December 31st. After that, it drops by €300.
The Government plans to reduce the grant by up to €300 every year as it expects the cost of solar panel systems to reduce over time. It is intended that the grant will end in 2029.
Most solar panel systems are quoted in kW peak (or kWp). If someone talks about a 3.5kW system, that’s the peak production the solar panel could generate in perfect lab conditions.
The grant is paid on a pro-rata basis, with €800 paid per kWp up to 2kWp. The total grant is capped at €2,100, covering 4kWp.
A three-bed family home will use about 4,200kWh of electricity a year, according to the Commission for Regulation of Utilities (CRU). How much panel power can you and should you get? A typical three-bed, semidetached house will take about 4.4kWp of solar panels, according to solar panel supplier PureVolt.ie. That will generate about 3,894kWh units of electricity, according to its estimates
Solar panels won’t make your house warmer, but they will reduce your electricity bills. The panels will also increase your Ber rating and this can make your home more valuable and enable you to access cheaper green mortgage rates.
Glynn used a credit union loan to fund his solar panels. The panels increased his Ber rating from a C3 to a B2. This qualified him for a cheaper mortgage and those savings helped pay down the solar panel loan more quickly.
For homes with a Ber of B3 or higher, AIB is offering a two-year fixed rate of 3.15 per cent for a loan to value of less than 50 per cent.
If you are borrowing under the Government’s Home Energy Upgrade Loan Scheme for other energy upgrade works, you can use 25 per cent of the money for solar panel installation.
And generating your own power means you are insulating yourself from price shocks.
Solar panels have definitely jumped from niche online forums to the mainstream. Last month, social media influencer and fake tan mogul Vogue Williams posted about installing 20 panels on the roof of her new Howth home. She hopes to see a 60 to 70 per cent reduction in her electricity bills.
About 119,300, or 6 per cent, of occupied dwellings had solar panels according to Census 2022 figures. Meath had the highest proportion of homes with solar panels at just over one in 10 homes, almost twice the national rate. Dublin city had the lowest at 3 per cent of homes.
Solar panel installation has jumped since that Census. Some 94,000 homes had solar panels installed this year, according to Irish Solar Energy Association figures, up from 60,000 last year.
“The average customer will be paying from €400 to €450 bimonthly on electricity. With a decent enough array of 10 to 12 panels, they are probably going to get that bill down to €220 every two months, almost halving their bill,” says Walsh.
