How solar and green energy could save you money

Who doesn't want to save money on their utility bills? But some people worry that installing green options into their homes can be expensive and it may take a long time for them to break even on costs. We look at what types of green energy could work best.

Some important considerations before you begin:

• Outlays will be more worthwhile if you're planning to stay in your current home long-term
• Grants can help with installation costs
• Energy-saving improvements could increase the value of your home

Which option is best?

Among the most popular options are solar panels, insulation, double glazing and air source heat pumps. There are grants available to help you with the costs. The government’s Green Deal (Opens in new window) available in England, Wales and Scotland, offers loans for improvements, including replacing windows and doors, installing secondary or double glazing, insulating your loft or walls, upgrading your heating and generating renewable energy from sources such as wind or solar power. Unlike grants, loans usually need to be paid back.

The average payback or break-even period for solar panels in the UK is around 15.5 years, according to theecoexperts.co.uk (Opens in new window)

One couple’s story

David and Angela North installed solar panels on their semi-detached house in East Sussex in 2022. Angela is involved in the local green movement and helps to run a monthly Repair Café in the local town.

'We were keen to choose the environment-friendly option because we want to be part of the solution,' says Angela. 'When we moved into our house, it was all electric heating. We decided not to install gas, to choose the eco option and because the future of gas was uncertain. We hope to install an air source heat pump one day too, so we will be almost self-sufficient in our retirement.'

'We didn’t get a grant for our solar panels. They cost £10,500 to install, including 9kW of battery storage. We will make the money back after the next nine years or so. We are currently saving about £1,160 a year, and we sell power back to the grid at the wholesale price, which varies a lot, between 1p and 9p/kWh.'

The family have a 6kw system, which in the summer makes 38–40 kw per day and uses between 15–18 kW per day. They sell the excess back to the grid. 'In winter, we get a lot less, and use up to 35kW daily. The solar panels save us around £47 per month, so the export in the summer is valuable to us.'

The couple have more plans for eco choices. 'When we get an electric car, it will save us a lot, as we can get on an EV tariff.^' This usually offers cheaper options for those charging an electric car at home.

Insulation

You can reduce heat loss with several methods of insulation, says Energy Saving Trust: 'For example, fitting your hot water cylinder with an insulating jacket will save you £35 a year in Great Britain and £45 in Northern Ireland in heating costs.' A quarter of heat is lost through the roof in an uninsulated home, they say. Correctly installed loft insulation could pay for itself many times over in its 40-year lifetime.

Air source heat pumps

You can get a grant in England and Wales for up to £7,500 for a ground or air source heat pump under the Boiler Upgrade Scheme (Opens in new window) In Scotland, you can get a grant of up to £7,500 (£9,000 for rural properties) for energy-efficient home improvements, including air source heat pumps.

Air and ground source heat pumps with an efficiency rating of 300% can save the average household £4,891 over 20 years compared to gas boilers, according to The Eco Experts: 'In a well-insulated home, with a highly efficient heat pump, one rated 350% or higher, you could save around £8,025 over 20 years. You also don’t need to replace a heat pump after 10 years, like a gas boiler. Air and ground source heat pumps typically last for 20 years.'

Sadie Dainton, consumer policy manager at the British Standards Institution, installed an air source heat pump for her rural home. 'I’ve always been interested in sustainability and reducing my impact on the environment,' she told Energy Saving Trust. 'I chose an air source heat pump with underfloor heating throughout the entire house – upstairs and downstairs – as well as fully insulating the property.' She finds the system very efficient, she says.

Double glazing

Double glazing for a three-bedroom house costs around £11,050 on average, according to The Eco Experts, and can save the average home up to £180 per year on energy bills. Double glazing is eligible for loans under the Green Deal.

There are many opportunities for green energy installations, and all of them offer significant savings, while many are eligible for grants or loans. Do make sure you get quotes from different providers before proceeding.

As a bonus, you'll probably boost the value of your property by cutting your Energy Performance Certificate (EPC) rating and should help tackle the climate crisis by saving on CO₂ emissions.

Looking for somewhere to keep your savings? Bank with Chase and you can open a saver account. Start saving with as little as you like, and we’ll calculate your interest daily and pay it monthly.

18+, UK residents. A Chase current account is required to open a saver account.

Recommended reading

• Should you rent, lease or own your car?
• Should you buy an electric car?
• Should I fix a new energy deal or stay on the price cap?

Disclaimer: The Hub is intended as a knowledge portal to provide information on a range of topics, including financial products. Articles may reference products and services that Chase UK does not currently offer. This article is for information only and does not constitute financial advice.