It is widely known and accepted that you can make noticeable savings on your energy bill using solar panels.
But were you also aware that you can also profit by switching energy contracts, or even energy suppliers, due to your newfound independence offered by a solar PV system?
What can you save on if you have solar panels?
There are many factors to cover that will have a direct effect on how efficient you can be with your monetary savings.
1. Electricity bills
Alongside using a renewable and environmentally friendly energy source, the main reason why you and many other homeowners may look to invest in solar panels is to generate energy directly, causing your monthly electricity bills to drop.
You can save more on your electricity bills depending on when you use the most appliances. This is because any electricity which reduces your electricity consumption, rather than being fed into the national grid, will make you greater savings.
You can make reductions by using more electrical devices in the daytime when your solar panels will be generating electricity and can directly power them.
However, should you also have a solar battery storage system, it is possible to cover your energy bills during the day or night and remove the need to consider your daily consumption habits.
2. SEG tariffs
By signing up for a Smart Export Guarantee (SEG) tariff, you will be paid for any surplus electricity fed back into the National Grid.
Unlike the aforementioned feed-in tariffs, you won’t be paid for all of the electricity you produce but can still make savings on your energy bill regularly. With an SEG tariff, energy suppliers have the ability to decide on the rate of pay, the length of the contract, and whether or not the tariff will be fixed or variable.
Fixed SEG tariffs pay a set rate of a kilowatt-hour (kWh) of electricity exported over the length of a contract.
As the name indicates, a variable tariff will have fluctuating prices, reflecting the state of the market and prices. Fortunately, it's in the interest of energy suppliers to make SEG rates attractive due to the increasing number of solar PV installations.
Because you will be settling for a fixed rate or subject to price movements, it is wise to shop around comparing suppliers before making your pick.
It is important to note that you cannot receive both a feed-in tariff and SEG payments simultaneously.
However, if you already applied and were accepted into the FIT scheme before applications closed in 2019, you can still opt out of the feed-in tariff programme if you wish to receive SEG payments instead.
3. Solar battery storage
Solar batteries are energy storage systems that homeowners can connect to their solar PV systems. They are usually made from lithium-ion and can store the electricity generated during the daytime by your solar panels.
Lithium-ion batteries are the most efficient batteries available on the market, delivering fast-charging and large capacity.
Solar panels operating without a battery attached are not maximising their potential as solar energy can only be used in the daytime when it is available. Unsurprisingly, the best time for solar panels to generate power is during the middle of the day – with the Sun being at its highest point.
If you work away from home for a significant number of hours every week, e.g. a 9-5 office job, then you won’t be optimising your solar usage. This is a consequence of being unable to utilise the solar energy captured during a large part of the day instead of feeding it back into the grid.
This is where the solar battery comes in…by adding this to the mix, you will see a significant increase in the benefit from your solar panels.
This is because all of the unused electricity generated throughout the day will be stored within the solar battery, allowing it to be used in the later hours when it will be needed.
Depending on the type of solar battery you choose, increasing your self-consumption and grid independence is possible.
Many solar battery systems will have a sufficient capacity to allow for this.
Read more about how does battery storage works?
4. Gas bill
Do you regularly heat or cook on gas?
If the answer is yes, it is a no-brainer to switch to a cheaper energy contract focused on gas consumption, as your electricity consumption is being mitigated through solar power generation.
5. Feed-In Tariffs
A Feed-In Tariff (FIT) pays you for any surplus energy you produce through your solar panels and feeds it back into the UK national grid – reimbursing you for easing the grid's energy load.
The FIT scheme closed to new applications on 31 March 2019; however, if you already had an eligible solar PV installation, you can continue to receive FIT payments.
When should you change energy suppliers with solar panels?
Switching to another energy supplier is always possible, but you may be subject to early exit fees depending on the provider and tariffs you are with.
Depending on your solar installation size, it may be advisable to review your current energy contracts to see if you can save money. Meeting your daytime consumption needs may allow you to negotiate a nighttime focused contract or something with similar specifications.
Keep in mind: If you swap energy suppliers and don’t have a smart meter installed, you will need to know your meter reading.
If you wonder when your annual meter reading is, you can find the date on your last energy statement.
Smart meters and solar savings
Having a smart meter installed is a wise decision as it allows you to calculate your self-consumption rate by knowing how much electricity you feed back into the UK National Grid.
Smart meters are the next generation of gas and electricity meters, provided free of charge upon request by your energy supplying company.
Because your metres provide information about your use straight to your supplier, you should only be charged for what you consume.