As electricity prices continue to rise and concerns about the environment grow, many homeowners are turning to solar panels as a solution.
Solar panels use the sun's energy to generate electricity, which can significantly reduce or even reduce monthly electricity bills. But how much can you really save by installing solar panels?
In this blog, we'll look at the factors that affect your potential savings, from your location to government incentives.
So, by understanding these elements, you can make an informed decision about whether solar panels are a good investment for your home. Discover the true potential of solar power and how it can benefit both you and the planet.
How Solar Panels Generate Electricity?
Solar panels are a fantastic way to save money on your electricity bills. By using the sun's energy, they help reduce your monthly costs.
Let’s explore how this works.
Conversion of sunlight into electricity
Solar panels capture sunlight and convert it into electricity. This electricity can then power your home, reducing the amount of energy.
By using the sun’s power, you can generate your own electricity and rely less on external sources. This means more savings for you each month.
Reduction in electricity bills
When you generate your own electricity with solar panels, you significantly cut down on the amount of electricity you need to buy from the grid. This reduction can lead to a noticeable drop in your monthly electricity bills.
Over time, these savings can add up to a significant amount. Imagine the relief of paying little to nothing for your energy needs each month.
How Much Can You Make Selling Electricity to the Grid?
Your solar export payment depends on your supplier’s export unit rate and how much electricity you export. Here’s a breakdown of the payments per unit, depending on the supplier:
- Pinergy: €0.25 per kWh
- From 1st of January 2023. Reported by RTÉ
- SSE Airtricity: €0.24 per kWh
- “payable twice yearly”
- Energia: €0.24 per kWh
- Increase from €0.18 to €0.24 reported by Energia on 2022-02-15
- Electric Ireland: €0.21 per kWh
- Flogas: €0.20 per kWh
- Community Power: €0.20 per kWh
- €0.20/kWh for microgeneration from 1st of July 2023
- Bord Gáis: €0.18 per kWh
- Yuno Energy: €0.16 per kWh
Electricity export amounts can vary widely. For instance, a house with 2 kW of solar panels, a power diverter, a battery, and high electricity usage might export as little as 200 units of electricity per year.
Conversely, a house with 9 kW of solar panels and low on-site electricity usage could export as much as 7,000 units of electricity annually.
Example: 6 kW of solar panels on an Irish roof can generate about 5,500 kWh of electricity per year. If half of this electricity is used on-site and your electricity supplier offers €0.20 per kWh, you could:
- Save €605 by producing electricity for your own needs
- Earn €550 for your exported electricity
- Benefit €1155 per year in total
Here’s a breakdown of potential annual earnings from exporting electricity:
- Pinergy:
- Small (1,200 kWh): €300
- Medium (2,500 kWh): €625
- X-large (5,000 kWh): €1,250
- Flogas:
- Small (1,200 kWh): €288
- Medium (2,500 kWh): €600
- X-large (5,000 kWh): €1,200
- SSE Airtricity:
- Small (1,200 kWh): €288
- Medium (2,500 kWh): €600
- X-large (5,000 kWh): €1,200
- Energia:
- Small (1,200 kWh): €288
- Medium (2,500 kWh): €600
- X-large (5,000 kWh): €1,200
- Electric Ireland:
- Small (1,200 kWh): €252
- Medium (2,500 kWh): €525
- X-large (5,000 kWh): €1,050
- Bord Gáis:
- Small (1,200 kWh): €220
- Medium (2,500 kWh): €462.50
- X-large (5,000 kWh): €925
How much you can earn by exporting solar to the grid in Ireland in 2024 can be quite substantial. Remember, this is just for export – your total savings will be even higher when you factor in the reduction in your own electricity costs.
What Are the Factors Affecting Savings with Solar Panels?
Several factors influence how much you can save with solar panels. Understanding these elements can help you make a better decision and maximise your savings.
Let’s look into the key factors that affect your savings.
Geographic Location
Where you live in Ireland plays a big role in how much you can save with solar panels. Areas with more sunlight allow solar panels to generate more electricity, leading to higher savings.
Regional differences in solar potential mean that some locations will see greater benefits than others. Living in a sunny area can significantly boost your savings.
Size of the Solar Panel System
The size of your solar panel system directly impacts how much electricity you can produce. Larger systems generate more electricity, leading to more significant savings.
The average savings will vary depending on the system size, but generally, bigger systems mean bigger savings. Choosing the right system size is crucial for maximising your benefits.
Electricity Rates
Electricity rates in your area play a crucial role in your overall savings. This will depend on the size of the installation and your energy usage, but based on a 4 kW installation and average electricity usage for a three-bedroom house, the savings may look like this:
- Energy costs
- Annual electricity use: 4,200 kWh per year
- Unit rate: 35.83c per kWh*
- Annual cost: 4,200 x €0.3583 = €1504.86
- Energy savings
- 4kW Solar PV system: 3,400 kWh per year
- Annual saving: 3,400 x €0.3583 = €1218.22
- Remainder left to pay: €286.64
The bottom line: A 4 kW solar system on a three-bedroom house could potentially take around 80% off your annual electricity bill and save you over €1,000 every year. Higher local electricity rates increase the financial benefits of solar panels.
Government Incentives and Rebates
In Ireland, government grants can greatly reduce the cost of installing solar panels. The grant amount depends on the peak output of your solar system, measured in kilowatt-peak (kWp).
- €800 per kWp for up to 2kWp
- €250 for every additional kWp up to 4kWp
This means you will get:
- €800 for 1kWp
- €1,600 for 2kWp
- €1,850 for 3kWp
- €2,100 for 4kWp
In 2024, the grant is capped at €2,100. The Government plans to reduce the grant by up to €300 every year, as it expects the cost of solar panel systems to decrease over time.
The grant covers materials and labour, unless you are a contractor doing the work in your own home, in which case only the cost of the materials is covered. If the cost of the systems and labour (including VAT) is less than the maximum grant amount, you will get a grant for the actual cost. Taking advantage of these incentives can significantly lower your upfront costs and enhance your savings.
By considering these factors, you can better understand how much you can save with solar panels and make an informed decision about investing in solar energy.
Conclusion
By producing your own electricity, you can significantly reduce your monthly bills. Add to that the generous government grants available in Ireland, which can lower your initial costs by up to €2,100, and the savings become even more significant.
With the potential to save over €1,000 annually, now is the perfect time to invest in solar panels. Take control of your energy costs and contribute to a greener planet. Contact us today to find out exactly how much you can save with solar panels and start your journey towards energy independence.
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