Green energy revealed: The advantages and disadvantages of solar power

We reveal the pros and cons of the burgeoning solar power industry.

Our lives are reliant on power and energy supplies but the sector has never been through a more turbulent time.

The oil industry is experiencing tumbling oil prices and uncertainty, a moratorium has been ordered on fracking and wind farms remain as controversial as ever.

But what of the other so-called renewable energy sources?

In this series we plan to analyse each of them, separating fact from fiction and delving into whether renewables are the key to tackling fuel poverty.

Here we focus on the burgeoning solar power industry.

Record numbers of us are spending thousands installing solar panels despite promises of huge savings failing to materialise for many homeowners.

Solar power hit a peak last year, with 650,000 solar panel installations carried out across the UK.

They ranged from solar farms to panels on homes.

The surge in use meant nearly five gigawatts (5GW) of energy was produced by solar power by the end of 2014, according to the Department for Energy and Climate Change.

That’s the equivalent to enough power for 1.5 million homes.

Paul Barwell, chief executive of the Solar Trade Association, hailed it a “landmark achievement”.

But experts are warning consumers to think carefully before they install panels.

Complaints to the Renewable Energy Consumer Code set up to protect customers have soared in recent years.

It received 1,305 complaints in 2013, compared to just 32 five years earlier.

The vast majority more than 77% were about solar panels.

While that’s to be expected given the growth in the sector, many critics say it is also a product of the fact the industry is largely unregulated.

Many of the complaints were about cowboy fitters, for example.

However a large number were also about the poor financial returns people have been getting from photovoltaic (PV) panels, which cost thousands to fit.

In this respect the number of complaints is expected to spike this year, given there has been a sharp drop in payments paid to households for generating electricity, known as the feed-in tariff (FIT).

FITs were introduced in 2010 and replaced grants as a way of luring people to back renewables.

It typically sees the solar panel owner paid a fixed rate for what is produced.

The current FIT rate is almost 15p per kWh. But that’s tumbled from a high of just over 43p per kWh just over three years ago.

Greg Whyte, of Glasgow-based law firm Jones Whyte, specialises in claims by customers mis-sold solar panels.

He said: “Solar power is a great product. It’s mis-selling that is the problem.

“We have noticed in the last six months that, more frequently, people have been signed up to FITs with solar companies and have been told lies or exaggerations.

“These include ‘it pays for itself’, is ‘self-funding’ or it will make ‘electricty or heating free’.

“The other thing we are finding is that firms will give a performance estimate. Every one of these systems is different, so the estimate is just that.

“Often people will pay out, say £10,000, on finance on the back of these promises that it will pay for itself and generate an income every month.”

However, the Energy Saving Trust said there was still money to be made, despite recent falls in FITs.

Chloe Duxbury, of the EST’s Edinburgh office, said: “Even though tariffs have reduced a little we are still seeing benefits of £625 a year, from around £640, and the reduction of households with photovoltaic panels is a reduction in energy bills.”

One place where the use of solar panels has rocketed is Clydebank, in West Dunbartonshire.

It may seem an unlikely solar spot but it one of the growing numbers of communities embracing the technology.

The town’s Knowes Housing Association has seen hundreds of its properties in Faifley and Duntocher go solar since 2010.

Most of the energy is sold to power companies via FITs, but residents get free energy as long as they are using it while the sun is shining.

Director of Knowes, Pierre De Fence, believes the scheme has alleviated fuel poverty in the traditionally working-class communities.

“Our research has seen just about all our residents who have been fitted with solar panels reporting shrinking energy bills,” he said. “That can only be a good thing.”

Back in 2010, high FITs meant the association was able to negotiate great deals leasing out its roofs. But plunging tariffs make new contracts less attractive.

Now, while residents benefit from free energy, solar firms keep all the Association’s FITs.

“Just now we think it’s still worthwhile,” Pierre added. “But it would be good to see the industry simplified.”

New figures show more than 35,000 homes and 600 businesses in Scotland have solar panels on their roofs.

Among those, one example, that of Tom Rennie, is said to be typical of how quickly the solar dream can be left in the shade.

The former farm worker of Castle Douglas, Dumfries & Galloway, forked out more than £11,000 to have 12 solar panels fitted to his roof in 2013.

He says he was promised a return of £26,000 over 25 years.

But he fears his panels will never generate the promised profits, despite him living in the south-west, Scotland’s the solar capital.

Tom, 70, said: “We had money sitting about and thought why not?

“The banks weren’t offering us any great returns on interest. A solar panel salesman came to see us and his promises sounded too good to be true.

“And that’s what turned out to be the case. The energy they are producing is nowhere near what we were told.

“My main problem seems to be we have an east-facing roof. South-facing is much better but that was never properly explained.

“We feel we were mis-sold. I’d bite someone’s hand off for a refund.”

Down the M6, it’s a similar tale. In Cumbria, residents in Longtown say they were forced by their housing association landlords to have solar panels fitted to their home under a green scheme and have paid through the nose for the privilege.

Their dreams of savings have evaporated.

Instead, residents are living a nightmare of higher heating bills.

Retired carer Annie Graham, 77, claims she has seen her electricity bills soar to nearly £3,000 a year compared to £1,750 previously.

In just one month she reportedly had to hand over £450 to heat her three-bedroom home.

A report into the issues at Longtown said some panels had been installed incorrectly.

But last year the landlord, Riverside Housing Association, offered a staunch riposte claiming most of the 175 households with the new panels had seen their bills reduced.

Despite the problems of a renewable future, the green lobby believes solar panels are keen to meeting energy needs on a mass scale.

With wind turbines blamed for destroying the countryside and plans for fracking in Scotland halted after last week’s announcement of a moratorium, solar just keeps on shining.

Scottish Renewables, the group who look after the industry, agrees the future looks bright.

Policy manager Stephanie Clark said: “Solar panels provide clean, cheap electricity and is perfect for homes, businesses and public buildings such as schools and leisure centres, where it can be used on-site to reduce fuel bills and carbon emissions.

“It will surprise many that the electricity generation potential of a solar panels array in Scotland is similar, if not better, than one in central or northern England or parts of Wales.

“Advances in solar panel design and the falling cost of the technology means Scotland really can be a hotspot for this type of green energy.”

So how does it all work and how can it work out for you?

The ideal locations for solar panels are south-facing roofs with no shading from trees or any buildings. And if you don’t have a south-facing roof think again.

Those panels will simply not work as efficiently. Don’t worry if you don’t think you get enough direct sunshine energy is generated by light levels, not direct sunshine.

Even the dank days of winter sees some solar energy generated.

The light activates the panels known as modern photovoltaic (or PV) panels, which generate the power.

You make money in two main ways. One method is easy to understand, one a bit more complex.

The first is by saving on your electricity bills by using the energy you produce at the time.

The second is because customers are paid a standard rate by their energy companies for any electricity they produce even if it is used.

The feed-in tariff (FIT) scheme means householders with solar panels fitted this year will be paid 15p per KWh they generate.

On top of this they will be paid 5p per KWh if they export it back to the grid if it isn’t used.

These payments are guaranteed for a 25-year period and attractively are tax-free.

These rates have been tumbling for the last five years often being announced by the government just weeks in advance.

However, as the FITs have tumbled, so has the cost of installing those solar panels.

Ikea even now sell them, starting at just over £5000.

For most households, you can expect to see an initial outlay of between £6000 to £9000 for an average-sized roof according to uswitch.com.

There are firms that give you the panels for free. But you should be aware that they will probably want all the lucrative FITs in return.

Report by Gordon Blackstock and Marc Meneaud