Could new plug-in solar panels help YOU fight soaring energy bills? Our simple formula will tell you exactly how many years it will take to cancel out cost of buying them

Plug-in solar panels were approved for use by households in England, Scotland and Wales just weeks ago, and already demand is soaring. For many they represent a way to make savings on energy bills as fuel costs spiral again.

As with traditional panels fitted on the roof, these generate electricity to run your home. However, they are substantially cheaper and don’t need professional installation – in fact, they can be connected via an ordinary plug socket.

You can put the panels in gardens, on top of outbuildings or on balconies. For the first time, they’re available in high street retailers such as Screwfix and Argos for less than £700 apiece. Sales have been high, with Octopus selling out of its first kits in just two weeks.

Its panels are about the size of a single mattress – 5ft 11in by 3ft 7in (1.8m by 1.1m) – and weigh 3st 7lb (22kg).

For some households, a plug-in solar panel could pay for itself within a few years. Others might wait more than a decade to recover their investment, while those with very high energy needs could be better off forking out more for a rooftop system.

Solar expert Simon Bones, founder of Genous Retrofitting, says the panels will help households make some savings, but warns that these are likely to be modest as the Government has limited the size and power of panels that you can plug in.

‘The absolute amounts are small,’ he says. ‘And you have to have somewhere to put it. If you’re losing your balcony to a solar panel, it is a question of whether that’s something you want to do.’

Whether solar plug-in will work for you depends on how much sunshine your panels receive, how much electricity you use during the day and what you will have to pay.

We’ve devised a simple four-step checklist, called LAMP, to help you work out whether plug-in solar is likely to save you money.

LAMP stands for Lifestyle, Aspect, My electricity and Purchase price, and gives you an estimated payback period.

All you need is a pen and paper to jot down each of your four ratings. You can then use our formula to see the number of years it could take you to generate enough electrical savings to cover the cost.

But first, note that not everyone can use plug-in panels.

Tenants and flat owners can be denied permission by their landlord or freeholder, while not everyone has suitable outside space. For example, if your space is all north-facing, you would struggle to generate much power as you won’t get enough hours of direct sunlight a day.

L is for Lifestyle

To best profit from the panels, you will need to use your household appliances when the sun is shining.

Under the new rules, plug-in solar systems cannot include integrated battery storage, unlike bigger, professionally installed systems.

That means you can’t save the electricity your panels generate to use later – you need to use the power as it is produced.

If you regularly run a washing machine, dishwasher, computer or other appliances during daylight hours, you’re more likely to use the electricity your panels generate.

To see if it’s worth it, choose what best describes your household. The percentage that most closely matches your household is your ‘Lifestyle figure’. This estimates the proportion of solar electricity you might use yourself.

Lifestyle figure

• Everyone is usually out during the day – 40 per cent
• Somebody is home for part of the week – 50 per cent
• Somebody is home most days, with regular daytime appliance use – 60 per cent
• Substantial daytime demand, such as regular daytime electric car charging – 75 per cent

A is for Aspect

Next, consider where your panels will go. An unshaded, south-facing position with the panels tilted towards the sun is generally best.

East- or west-facing panels can still generate a useful amount of electricity, although output is likely to be lower. Vertically mounted panels, such as those on balcony railings, may generate less over a year.

Choose the number that most closely matches your proposed installation position.

Panel position

• South-facing, suitably tilted and unshaded – 1.0
• East- or west-facing, suitably tilted and unshaded – 0.8
• South-facing but mounted vertically – 0.7
• Less favourable position – 0.5

Now, to estimate how much energy your solar panel could generate, measured in kilowatt hours, multiply your aspect rating by 700.

This is an approximation assuming you have the maximum 800W system allowed under the current rules. If your system’s maximum is less than this you will need to adjust accordingly.

The figure of 700 comes because the Energy Saving Trust estimates that an 800W system in Manchester, facing south with a tilt of 30 degrees without shade, could generate about 700 kilowatt hours (kWh) a year.

M is for My Electricity

Now track down one of your electricity bills to find the unit rate. This is what you pay for each unit or kWh of electricity.

Every unit of solar electricity you use from your panel saves you from buying a unit from your supplier.

Energy regulator Ofgem’s average rate is 26.32p a unit, but you should substitute your own rate in the LAMP calculations.

Your M figure is the price you pay for electricity.

P is for Purchase price

Finally, work out what you’ll need to spend to get the panels working. This is your P figure.

You’ll need to factor in the cost of the panels as well as extras such as mounting equipment.

Don’t assume that any outdoor socket or extension lead will be suitable. Follow the product instructions and seek professional advice if your electrical installation needs checking or adapting.

Many people may need a qualified electrician to put in a waterproof outdoor socket.

Work out your result

You now have the four pieces of information you need.

Step one: Calculate how much electricity your panels might generate. Multiply your Aspect figure by 700 to calculate how many kWh – often just called ‘units’ – your panels might generate over a year based on how well-situated they will be.

Step two: Estimate how much of that electricity you’ll use. Multiply the figure you got from the first step by your Lifestyle percentage to show how much of the electricity you generate you’ll be able to use by being at home when the sun is shining. For example, if you expect to generate 700 units and are home most days, with regular daytime appliance use (lifestyle score of 60 per cent), you will be able to use 420 units on average.

Step three: Work out your annual saving. Multiply the number of solar-generated units you’ll use (420 in the example above) by the electricity price you pay per unit (let’s say Ofgem’s 26.32p per unit) and divide by 100 to get a figure in pounds. This will show how much you will save by using your own electricity instead of power pulled from the grid.

Step four: Calculate how long it takes to cover the cost. To see how many years it would take to recoup the upfront cost of buying a solar panel, divide the total purchase price and connection cost by your annual savings.

What the result means

Less than five years: You’re a gold-standard candidate. Your panels could pay for themselves fairly quickly, leaving you with more years of potential savings.

Five to eight years: You’re a good candidate. Plug-in solar could make financial sense, especially if you expect to remain in your home or can take the panels with you if you move.

Eight to 12 years: Think carefully. You may still save money, but recovering the initial outlay is likely to take a long time.

More than 12 years: Poor financial prospect. The savings may be too small to justify the investment.

These figures are all estimates, not guaranteed returns. They assume that electricity prices remain unchanged and exclude maintenance, replacement costs and any export payments.

In practice…

Let’s take a couple who work from home and have a south-facing balcony but their panels would have to be mounted vertically on the railings.

Their Aspect figure is 0.7, which means – multiplying by 700 – their panels are estimated to generate 490kWh annually. They regularly run appliances during the day, giving them a Lifestyle figure of 60 per cent. Which means they will use about 294kWh of the 490kWh generated annually.

At 26.32p per unit, that would save about £77 a year – the usable 294kWh generated multiplied by the cost per unit.

Their kit costs £660, with another £120 needed for electrical work – a total of £780. This gives them a LAMP result of 10.1, meaning that to recoup £780 with savings of £77 a year would take 10.1 years.

They could still benefit, but the vertical mounting and additional connection costs make the investment less attractive.

They would also need the necessary permissions.

A bright decision?

Plug-in solar could give more households a relatively inexpensive way to generate their own electricity.

But having a big electricity bill doesn’t automatically mean making the biggest savings. What matters is the total amount of electricity the panels generate, whether you can use it while the sun is shining and how much you have to spend to get started.

Some heavy energy users might be better off with a fully installed kit, which will generate far more electricity.

According to the Energy Saving Trust, a typical 4.5kW rooftop system costs about £7,600 to install, compared with £660 for these new plug-in kits.

However, it can cut bills by hundreds of pounds a year and you can earn money by selling surplus electricity back to the grid through the Smart Export Guarantee. And you could also install a battery to use the solar power whenever you want.

There could be changes coming that make plug-in panels suitable for more people.

Energy provider Octopus is hoping to launch a version with a battery in the first quarter of next year, subject to regulatory changes. That could mean even those who don’t use much electricity during the day can benefit from solar plug-in power.

Have you tried a plug-in solar panel? Let us know by emailing money@mailonsunday.co.uk