Resolution Foundation

Solar energy installations are soaring, but we need to make sure all households can reap the benefits

Fewer than 20,000 of the more-than-4 million privately rented homes in England and Wales (0.5 per cent) have solar panels installed
Net Zero

Soaring energy bills and sunny weather have driven solar power installations to a seven-year high. More than 500 megawatts of capacity came online during the first half of 2022, levels not seen since huge subsidy cuts in 2016.

Most of this growth is playing out on the rooftops of the nation’s homes, as families act to reduce both carbon footprints and energy bills, which are now forecast to top £3,000 this winter: roughly tripling inside two years.

With solar panel costs down 60 per cent since 2010 – high reliability and consumer satisfaction, and panels only taking a couple of days to install – it is easy to see why demand is increasing.

A standard solar installation can reduce energy bills by a sixth, or in the region of £500 per year based on estimations for this winter.

Add on expectations that a household can make £100 to £200 per year for exporting power to the grid and payback periods – the amount of time it takes savings to overtake initial costs – can be as low as 4.5 years.

Yet without government assistance, this solar boom is likely to compound existing inequalities in solar energy generation.

Families that are wealthier, live in large detached or semi-detached homes, and in the South of England are much more likely to have gone into the energy crunch with some protection in place from solar panels.

And now as new installations are increasing, it is households with cash to invest that are taking the plunge.

Currently, the only support on offer from Government is a discount on VAT and a ‘Smart Export Guarantee’, which offers payments for electricity generated and fed back into the grid, but at a much less generous level than the feed-in-tariff that drove the UK’s solar boom in the early 2010s.

Crucially, these offer little help with upfront costs, thereby requiring families to stump up substantial costs themselves.

Without a contribution toward upfront costs, households facing financial misery when energy bills jump again in October will have more on their mind than finding a few thousand pounds for solar upgrades, even despite the longer-term sense it makes.

Exclusion from the solar market isn’t only an issue for low-income families. Fewer than 20,000 of the more-than-4 million privately rented homes in England and Wales (0.5 per cent) have solar panels installed, according to Resolution Foundation analysis, compared with about 5 per cent of owner occupied or socially rented homes.

With no incentive for landlords to invest, renters – already facing large jumps in rental costs and most likely to live in poorly insulated homes – are set to face yet another bad deal.

And it isn’t all plain sailing for homeowners lucky enough to have savings to invest: those living in leasehold properties will also find it harder to jump on the solar bandwagon.

As an incoming Prime Minister looks to set out a new vision for energy, both in terms of short-term support to prevent a bloodbath this winter – but also to accelerate the move to a greener, cheaper and more self-sufficient system – ensuring that all have access to low cost energy needs to be a priority.

Solar power generates only 4 per cent of annual electricity, and with one of the front-runners pledging to make the UK energy independent by 2045, much more will be needed.

With expectations that electrifying the nation’s cars and boilers could see power demand double by mid-century, we should probably get on with it.

As such, as a new government looks to long term solutions to ease the cost of living crisis, get back on track to net zero, and reduce energy imports, an approach that lets households up and down the country generate power at home should be front and centre of plans.

There are clear cash gains to be had from the transition to net zero, with solar just one of many examples.

The key task for policymakers is to ensure that these benefits are available to all households, so that the whole of society is able to buy into the zero-carbon revolution.

This article was first published in inews