German-style plug-in solar panels are coming – can they save you money?
David Strahan is a writer and editor specialising in clean energy. He has previously written about his experiences with low-carbon technology.
My heat pump saves me good money , and my planned electric vehicle (EV) purchase – delayed only by a pesky knee injury – will do the same. But even my enthusiasm for thrifty low-carbon technologies has been tested by the Government's latest scheme: plug-in solar.
It was meant to be simple and cheap. But developed in haste, with just five months between announcement and launch, the policy suffers from drawbacks and hidden costs.
Batteries are banned for now, there is no mandatory export tariff for the power you generate but don't consume, and electrical experts disagree about whether the plans are even safe .
Nevertheless, plug-in solar panels could still save you several thousand pounds. But to make the most of it (and do so safely), you'll need to do more than plug and play.
How does plug-in solar work?
The idea is copied from Germany, where more than a million homes now have small-scale solar systems on a balcony or in the garden that plug directly into a wall socket, and which retailers such as Lidl have been selling for as little as €400 (£340).
In Britain, plug-in solar becomes legal on Aug 27 – squeaking in four days before the end of meteorological summer, the season when the Government promised to launch it – and several retailers are already selling uncertified equipment online.
The Government hopes it will help with the cost of living crisis and democratise access to cheap renewable energy for renters and flat-dwellers.
Until now, domestic solar has largely been the preserve of homeowners. A typical rooftop installation might comprise eight to 10 panels generating around 4kW at peak and 4,000kWh per year – far more electricity than the average (non-heat pump, non-EV) home consumes.
This kind of installation must be connected to the home's consumer unit (fuse box) by a qualified electrician through a dedicated cable with its own protective device. Along with the scaffolding and roof work, this is what makes conventional solar more costly – although war in the Gulf has pushed installations to a 15-year high .
"Plug-in" solar is quite different. The system output will be limited to 800W – equivalent to roughly two standard solar panels or four half-sized ones. These connect through a device called a microinverter, which converts the power from DC to AC current, and a normal three-pin plug that goes into one of your wall sockets. The power then flows "backwards" into the home.
The Government estimates plug-in solar panels could save you £70-£110 per year depending on the direction they face, their tilt and any shading. That's roughly double the average saving of removing VAT on electricity bills , announced by Prime Minister Andy Burnham on his first day in office.
If these assumptions are broadly right, and if the system costs you £400, it would pay for itself in four to six years (see table below). The panels should last 25 years and over that period save between £1,200 and £2,200 after paying off the purchase price.
That's the theory anyway. The true installation cost is likely to be significantly higher than the sticker price. On the upside, however, an export tariff might be available after all – though no thanks to the Government. More on that later.
The safety catch
On the cost side, one major issue is safety – which has raised concerns ever since the idea was initially proposed earlier this year.
The Government insists plug-in solar is safe, based on a study that lab-tested six systems on a range of typical British wiring set-ups. It concluded "safe operation is achievable within representative domestic installations", without changes to wiring or protective devices. The authors acknowledged, however, that the study could not "capture the full variability of real-world domestic installations".
Several electrical safety organisations flatly disagree because of two key points. First, whereas Germany allows only one plug-in solar system per home, in Britain the Government will eventually permit one per circuit, meaning most properties could install at least two – and some could have many more. The safety study did not test this scenario.
Second, the standard of protection provided by residual current devices (RCDs) in British consumer units is generally lower than those in German ones.
Both factors could increase the time it takes for the power to be cut off in an electrical emergency, according to the Institution of Technology and Engineering (IET), which sets British wiring standards. This raises the risk of injury or death should someone drill through a cable, for example, or touch the contacts of a lighting socket.
Because of this, the IET called last month for the Government to impose mandatory wiring tests on any home intending to install plug-in solar, but the Government refused. A DESNZ spokesman said: "Plug-in solar panels have been rigorously tested on UK house wiring. There is no evidence that installing plug-in solar devices on separate circuits within the same property would impact safety protections."
Nevertheless, the IET continues to advise consumers thinking of installing plug-in solar to have their wiring checked by a professional.
"I would never install plug-in solar without – at a minimum – getting a qualified electrician to inspect the wiring and upgrade the RCDs if necessary," says Mark Coles, the IET's head of technical regulations. "No financial saving is worth the risk of electric shock or a house fire."
Safety improvements could significantly increase the overall cost of plug-in solar. A standard Electrical Installation Condition Report (EICR) carried out by a qualified electrician typically costs around £200, and any remedial work – such as upgrading RCDs to the equivalent of German standards – would come on top.
I took two quotes and each came in around £400. You might find cheaper, especially outside London, but on this basis the safety work would double the capital cost of plug-in solar. If, like me, you would also need to install some outdoor sockets – connecting plug-in solar by extension lead is forbidden on safety grounds – the quote for that was another £130.
The savings snag
As well as potentially costing more initially, the savings are highly unlikely to match the theoretical maximum.
Even if your solar panels are at the perfect angle and never in the shade, you'll probably miss the prime time during the middle of the day to actually use the energy they produce.
On a clear summer's day, your plug-in solar might be generating 700W, but if your home's baseload consumption, like mine, is around 200W, then most of the energy will be exported to the grid. And, under the Government's plans, you would not be paid for it.
If you are at home during the day, and have been suffering in the heatwaves, a portable air conditioner would be one way to make use of any surplus solar, but otherwise the options to load-shift are limited.
The Government itself assumes that users of plug-in solar will consume only 62pc of the electricity they generate overall. Yet the current scheme includes neither of the two possible solutions that would allow people to benefit from the rest.
One obvious answer would be to install a plug-in battery – many solar systems in Europe come with one included – but these are not yet legal in Britain. The Government will hold a separate consultation and cannot say when they will be allowed.
"This is regrettable," says Charlie Mercer of the Startup Coalition, which represents British battery developers, "because batteries are what turn modest solar savings into meaningful ones".
Another solution would have been for the Government to mandate that energy suppliers provide an export tariff, as they must for qualifying rooftop solar – but it hasn't done so.
If that were the end of the story, the financial returns would look far less attractive. The additional safety costs would delay payback to more than eight years, making the prospect far less compelling to anyone looking for a quick reduction in their energy bills. Luckily, some energy suppliers intend to step in.
Tariff teaser
Although the Government is not forcing energy suppliers to offer an export tariff, some will do so voluntarily. Octopus Energy told me that any customers with plug-in solar will be able to access existing export tariffs such as Outgoing Octopus, which currently pays 12p/kWh.
A spokesman said: "Once the registration process is clear, we'll make it easy for customers to sell any spare electricity they generate back to the grid and get paid for it." Octopus thinks the average household might earn around £40 from exports.
Fuse Energy has also confirmed it is planning to introduce an export tariff, although not the rate it would pay.
Piers Courtney, who writes for the website Plug-In Solar, Explained, is not surprised at these early movers. "The first supplier to offer an export tariff for plug-in solar will clean up," he says, "and more are bound to follow".
It would still always be better to consume a kilowatt-hour of your own solar power – saving 26p/kWh – than to export it for 12p/kWh. But the export tariff means that even if you forget to set the washing machine for the sunniest time of day, you'll still get some benefit for every kilowatt-hour you generate – raising the annual benefit to £143, as shown in the table above.
On that basis, if we assume Lidl pricing plus safety and sockets, the total investment cost is £930, which pays for itself in six and a half years.
But if, like me, you're happy to put the cost of the EICR (£200) down to general household maintenance – on the grounds that I should occasionally have the wiring checked for safety anyway – the payback comes in five years with lifetime savings of more than £2,500.
Either way, the extra safety and socket costs are more than covered by the export earnings.
Who will benefit from plug-in solar?
To start with, possibly not very many. The scheme goes live on Aug 27, but it will probably take time for manufacturers to get their systems tested and registered on the Energy Networks Association (ENA) website. It may be worth waiting for the market to develop rather than snap up the first "deal" you see.
Even when certified products are available, it is not clear whether the scheme will benefit renters and flat owners as widely as intended. In Germany, they call it "balcony solar", but that's a misnomer: most systems have been installed in houses, and overwhelmingly (76pc) by owner-occupiers, not renters, according to an industry report.
Britain can probably expect a similar pattern: it has roughly 21 million domestic gardens but fewer than 400,000 flats with balconies. In any event, flat-dwellers would need the freeholder's permission to mount solar panels on the outside of a building, which could well be denied. In Germany. tenants have a legal right to install, but that doesn't exist here.
For anyone with outside space that doesn't require permission, plug-in solar could be a solid investment, even with the extra costs. But flat-dwellers may do better to skip solar altogether and wait until plug-in batteries are legalised.
A battery without solar panels but coupled with a time-of-use tariff could produce similar returns, and take up much less space.
