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 company to cover the huge upfront costs.

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

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

Scottish Power, meanwhile, has said repayments on its loans could be as low as £132 a 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.

Scottish Power’s financing plan allows households to buy and install their solar systems with no down payment 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 roof system with six panels on a roof with concrete tiles, without complicated matters such as installation above a conservatory or digging trenches for electricity.

In total, it would cost € 6,050 up front for an installation of this type. But at a fixed rate of 11.9 per cent, the total amount to be repaid would be £7,947 – of which £1,897 would be interest – in 60 monthly installments of £132.45.

Is it cheaper to have fewer solar panels?

Solar panels capture energy from daylight and convert 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 is not directly related to the number of panels you install.

The costs for scaffolding a home are often the same, whether you have eight or a maximum of 20 panels installed, for example.

So while you pay more for more panels, you spread the cost of that larger system over the same cost base.

The power of the panels also influences the price. An installation of 3kW solar panels on a typical roof requiring scaffolding can cost in the region of £5,000.

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

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

How much does a battery cost?

With a battery you can store the energy produced by your solar panels.

Typically, according to the Eco Experts, a household wastes 50 percent of the electricity produced by solar panels.

With a battery installed, you can use any extra solar energy you haven’t used during the day.

This means you can keep the energy 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 difference in saving on your energy bill.

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

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

According to GB solar, the cost for a typical system using only solar panels with a capacity of 4kW (without battery) is normally between £5,000 and £6,000.

With a battery, that price could then range from £9,000 to £13,000.

How much can I save with a battery?

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

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

It is much more beneficial for you to use the generated energy than to send it back to the grid for a fee. You only receive a maximum of 15 pence per kWh when you sell back energy.

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

On a clear day, your solar panel system can power your home while you’re not there, and when you get home you’ll have a full battery to power you through the evening, night, and sometimes the next day.

So if you’re away from home during the sun’s peak hours, a battery pack could be worth it.

However, keep in mind that not all energy suppliers allow you to export stored energy.

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

‘If you don’t have a battery, you only get 4 pence per kWh from my supplier for 50 percent of the excess you generate.’