A guide to solar panels in Scotland

While it might be tempting to assume solar power is blunted by the northerly British climate, modern solar panels function well in cloudy conditions and actually prefer to run at the cooler temperatures the UK can deliver. 

Scotland increased its renewable energy capacity by 29.2 per cent in the first half of 2022. And while it’s fair to say wind power is leading this trend, solar energy plays its part, particularly for domestic homeowners. 

Scotland’s solar capacity also rocketed in 2022, doubling year-on-year capacity increases registered in 2015 and before. 

This guide explores the viability of solar installations in Scotland and how to get the best out of them.

While wind power forms the mainstay of Scotland’s renewable mix, solar boasts versatility in that virtually any homeowner can generate power from a solar installation. 

This helps homeowners detach from the grid and generate their own electricity. Solar power is particularly useful in isolated, rural areas that are either off-grid or don’t have a reliable grid connection.

Environmental benefits

• Reduced carbon emissions: As people collectively grapple with the challenges of climate change, solar panels directly contribute to reducing greenhouse gas emissions by generating electricity without burning fossil fuels. The carbon emissions caused by solar panel manufacturing are typically balanced after around three years of use. 
• Commitment to renewable energy: Scotland has set ambitious renewable energy targets. The Scottish government aims to produce 50 per cent of the nation’s total energy consumption (across electricity, heat and transport) from renewable sources by 2030. Solar panels are pivotal in achieving this, supplementing other renewable sources such as wind and hydro.
• Preservation of natural habitats: The use of traditional energy sources such as mining and drilling often results in habitat destruction. To some extent, the use of renewable energy sources such as wind farms does, too. Rooftop-installed solar systems, in contrast, have a miniscule impact on habitats and biodiversity.

Financial benefits

• Immediate energy cost savings: From the moment they’re operational, solar panels start saving homeowners and businesses money. With a solar installation, people can drastically reduce or even eliminate their monthly electricity bills. Over the lifespan of a solar system (usually 25-30 years), these savings accumulate. And while the upfront investment in solar is significant, the system itself is a long-term asset.
• Protection against rising energy costs: The volatile nature of fossil fuel prices means that electricity costs continually fluctuate. By investing in solar panels, Scots can lock in a consistent energy price, making them less susceptible to market volatility. This not only provides financial savings but also valuable peace of mind.
• Smart Export Guarantee (SEG) and other incentives: The SEG enables owners of small-scale solar systems to export some of their unused electricity back to the grid in return for a tariff. There are other incentives, too, such as the ECO4 grant.
• Enhanced property value: Homes and commercial properties equipped with solar installations often see an increase in their market value. Prospective buyers are increasingly environmentally conscious and appreciate the reduced energy costs associated with a solar-powered property. So, while solar systems require an upfront investment, this is recoverable. 

Scotland might be known for its lush green landscapes, misty mornings and occasional grey skies, but don’t doubt the effectiveness of solar in the UK. 

Despite prevailing misconceptions, solar panels are not exclusive to sun-drenched regions. 

Solar panels function effectively under varying light conditions, which makes Scotland a viable candidate for solar installations.

Efficiency during cloud cover

• Understanding insolation: Insolation refers to the amount of solar radiation received at a given location. While Scotland might have lower insolation values than sunnier parts of the world, it’s essential to understand that solar panels don’t require intense, direct sunlight to function.
• Modern solar panel technology: Advancements in photovoltaic (PV) technology mean that today’s solar panels can capture a broader spectrum of sunlight. Modern panels can harness energy even in diffused light conditions typical of overcast days. Hence, while peak performance might be achieved under direct sunlight, a significant percentage of the panel’s capacity is still realised during cloudy conditions.
• Energy generation on cloudy days: On a typical cloudy day, a solar panel might operate at 10-25 per cent of its capacity, depending on the thickness of the cloud cover. Over the course of a year, these days significantly contribute to the panel’s annual energy yield.

Performance across seasons

• Variations in daylight hours: Scotland, being in the northern hemisphere, experiences significant variations in daylight hours between summer and winter. Longer summer days mean extended periods of energy generation, which can compensate for shorter winter days.
• Reflective properties of snow: Although winter in Scotland means fewer daylight hours, snow can act as an unlikely ally for solar panels. Snow’s reflective surface can increase the sunlight panels receive, enhancing their productivity. Of course, this is contingent on the panels themselves being free of snow coverage.
• Consistent year-round contribution: Even during the shorter days of winter, solar panels in Scotland consistently contribute to the household or business energy mix. Although the panels produce less energy than they do on peak summer days, the amount is far from negligible.

While the initial investment into solar can seem daunting to some, the long-term savings and the broader environmental benefits often make it a shrewd economic choice.

Here’s a breakdown of the financial costs associated with solar energy in Scotland.

Upfront costs

• Solar panels: As the core of the system, solar panels constitute a significant portion of the upfront cost. Depending on the type (monocrystalline, polycrystalline or thin-film), the price can vary. For example, a typical monocrystalline panel might cost slightly more than its polycrystalline counterpart but usually offers better efficiency.
• Inverters: These devices convert the direct current produced by solar panels into alternating current, which is suitable for household use. There are various types of inverters, such as string inverters and microinverters, with associated cost implications.
• Mounting equipment: Depending on whether the panels are roof-mounted or ground-mounted, the required mounting structures and their costs can differ
• Installation fees: Labour and expertise are not free. Certified installers might seem pricier than their non-certified counterparts, but the quality and compliance they bring to the table often justify the premium.
• Additional costs: There might be additional costs associated with site assessments, electrical works and potential structural reinforcements if needed.

Payback period and savings

The payback period refers to the time it takes for the energy savings (and potential income from feed-in tariffs or other incentives) to equal the initial investment.

Annual energy consumption

The average household in the UK has an annual electricity usage of about 3,500kWh. This sets the baseline for calculating the savings solar panels can offer.

Potential savings

Recent data from 2023 indicates that solar panel adoption can significantly lower yearly electricity expenses. While the average UK household electricity bill stands at £1,190, those with solar panels can expect a decrease to roughly £865 a year, a substantial saving given escalating energy prices.

Smart Export Guarantee

Scottish households can benefit from the SEG, which rewards you for exporting surplus energy back to the national grid. By taking advantage of the SEG, you can potentially reduce your net annual energy cost even further, bringing it down to about £465.

Return on investment (ROI)

With these savings in mind, Scottish homeowners can anticipate a return on their investment in solar panels within approximately 12 to 17 years.

In some instances, particularly with additional grants or higher energy prices, the payback period could be as short as seven years. After reaching the break-even point, solar panels provide financial benefits, cumulatively increasing the savings over time.

Financing options

Rather than paying for the entire solar system upfront, there are methods of financing solar technology to spread the cost:

• Green energy loans: Specialist lenders such as Lendology sometimes offer loans specifically designed for renewable energy projects including solar panel installations. These loans typically come with competitive interest rates, making them an attractive option. However, they may include certain stipulations, such as the requirement to repay the loan in full if you sell your property while the loan is still active.
• Hire purchase agreements: A hire purchase agreement allows you to pay for your solar panel system in instalments over an agreed period, reducing the burden of a lump-sum payment.
• Solar provider financing plans: Many solar panel providers in Scotland have their own tailored financing plans. These plans are designed to provide customers with an accessible route to owning a solar system, with various terms and conditions that accommodate different circumstances.

Scotland is fostering a greener future with solar panel grants and incentives designed to make renewable energy more accessible. 

The principal program, the government-backed Energy Company Obligation (ECO), offers many households, especially those with someone receiving benefits, the opportunity to receive free solar panel installations. 

Eligibility for free solar panel grants

The ECO4 grant scheme, running from April 2022 until 2026, presents opportunities for households to make energy-efficient upgrades.

To be eligible, a household member must be claiming certain benefits, such as working tax credits, child tax credits or universal credit. Homes with an EPC rating of E, F or G are targeted to benefit most from the new solar PV installations.

For families with lower incomes claiming basic child benefits, there are additional income thresholds that determine eligibility for the grant, which are structured based on the number of children and whether the claimant is single or part of a couple.

Home Energy Scotland Grant and Loan Scheme

Aside from the ECO scheme, the Home Energy Scotland Grant and Loan Scheme offers financial assistance for solar panel installations, including partial non-repayable grants and interest-free loans. 

Funding options for solar technology include:

• Solar PV panels: Available funding totals £6,000, which includes a £1,250 grant and an additional £4,750 as an optional loan. However, access to this funding is conditional upon the PV panels being part of a bundled package of energy-saving measures.
• Solar water heating systems: These systems can be funded by a loan up to £5,000, but there is no grant available for this option.
• Hybrid solar PV/water heating systems: Funding for these combined systems is available in the form of a £5,000 loan, with no grant option offered.

Zero VAT rate

Zero per cent VAT on solar panels and other renewable technology lasts until 31 March 2027. 

Additional incentive programs

Scottish homeowners can take advantage of a variety of additional incentive schemes, some of which are extended by banks to their mortgage customers:

• Barclays Greener Home Reward: Customers with a residential mortgage from Barclays may be eligible for a cashback reward of £1,000 for installing solar panels. To qualify, the installation must be completed by a business registered with TrustMark, ensuring the work adheres to government-endorsed quality standards.
• Lloyds Bank Eco Home Reward: Lloyds Bank has introduced an incentive for its mortgage holders, offering up to £500 cashback when they install solar panel systems, contributing to both the environment and household savings.
• Halifax Green Living Reward (also applies to mortgages made through Bank of Scotland branches): For those holding or applying for a mortgage with Halifax, there is an opportunity to claim a cashback of up to £500 as a reward for the installation of solar panels, promoting greener living choices.

Installing solar systems requires specialist expertise. It’s not just about installing and connecting the components themselves but about building smart, optimised systems that suit people’s needs. 

For starters, there are three broad types of solar systems, which are:

• grid-tied systems, which attach to the main electricity grid and typically don’t have significant battery storage;
• off-grid systems, which incorporate battery storage to save unused excess energy for later; and
• hybrid systems, which combine batteries and grid connections for a flexible setup.

Here’s a brief account of the setup process:

Initial assessment

• Site evaluation: This is the preliminary step, in which professionals evaluate the property to determine its solar potential. They assess factors such as roof angle, orientation, potential shading and structural integrity.
• Energy yield estimations: Based on the assessment, installers can provide a ballpark figure on the expected energy yield. This projection informs the system’s size and potential ROI.

Design and equipment selection

• Customisation: Every property is unique, and its solar solution should be, too. Installers create a tailored design, optimising panel placement for maximum sunlight exposure.
• Choice of equipment: As mentioned, different solar systems require different combinations of components such as panels, batteries and inverters. Based on the property’s needs and budget, the most suitable equipment is chosen.

Certified installers

• Importance of certification: Solar installation is a technical process that demands expertise. Certified installers in Scotland undergo rigorous training, ensuring they’re well versed in best practices, safety protocols and local regulations.
• Accreditations: Look for Microgeneration Certification Scheme (MCS) accredited installers in the UK. Using an MCS-certified installer is often a prerequisite for accessing certain grants and incentives.

Permits and permissions

• Regulations: All solar installations must adhere to building regulations 

• Listed buildings: Modifications to listed buildings require specific consent, and failure to obtain it is a criminal offence.

• Planning permission: Homeowners in Scotland can modify their homes without planning permission via permitted development rights (PDRs) subject to certain rules. Homes in conservation areas and some localities are exempt from automatic PDRs, so always check with your local council.

As with any equipment, the efficiency and longevity of solar panels are closely linked to their upkeep. 

Regular maintenance not only ensures optimal energy production but also prolongs the lifespan of the installation.

Regular maintenance tasks

• Cleaning: Dust, bird droppings and other debris can accumulate on the panels over time. Cleaning them periodically, especially after long spells of dry weather, can enhance their efficiency. Professional cleaning services are generally recommended.
• Physical inspection: Checking the panels for any physical damage, such as cracks or warping, can prevent minor issues from escalating. This is particularly relevant in areas prone to harsh weather conditions or bird activity.
• Electrical check: Periodically inspecting the inverter, wiring and connections ensures the entire system is functioning efficiently. While homeowners can conduct visual checks for frayed wires or loose connections, it’s advisable to have a professional technician perform a detailed inspection annually.
• System monitoring: Modern solar installations often come with monitoring systems that provide real-time data on energy production, efficiency and potential issues. Regularly reviewing this data can offer insights into the system’s performance and any areas needing attention.

How to monitor solar panels in Scotland

Modern solar systems often come equipped with analytics apps that deliver data to web browsers or smartphone apps. Monitoring the system can provide valuable insights and identify gradual or abrupt changes in performance. 

• Optimising energy production: Monitoring allows homeowners to understand daily, monthly and yearly energy production patterns. This can guide usage habits, ensuring maximum self-consumption and minimum reliance on grid energy.
• Early detection of issues: Regular monitoring can flag potential issues, such as drops in efficiency or irregular energy production patterns. Addressing these issues promptly can prevent more significant problems down the line.
• Financial planning: Understanding the system’s performance can influence financial decisions, especially when you’re using the SEG. Knowing how much energy is produced and fed back into the grid can clarify potential earnings.

Embracing solar power unlocks energy independence, lower utility bills and a reduced carbon footprint. 

The average Scottish household can slash their electricity bills through solar installation and leverage benefits such as the generous Home Energy Scotland Grant and Loan Scheme, SEG and ECO4 scheme.

The Scottish climate can deliver sufficient sunlight for effective solar energy generation. With an ROI potentially in as little as seven years, and with minimal maintenance requirements, solar panels are not just an eco-friendly choice but a financially savvy one.

It’s essential to choose reputable installers and to be aware of the necessary permissions, especially for listed or historic buildings. Professional installation can ensure long-term system performance, but regular maintenance is also crucial.