Households could save £823 a year on their energy bills by installing solar panels and batteries

As Ofgem announces higher energy bills from July, households could save £823 a year by installing solar panels and batteries on their homes, according to analysis from the New Economics Foundation (NEF), out today. Energy bills are due to rise, but almost 44% of an annual energy bill under the price cap could be avoided with the installation of home solar power.

Yesterday Ofgem announced that from July the energy price cap will increase by over £200, from £1,641 to £1,862 a year. Energy bills will rise due to fossil-fuel supply being disrupted by the US war on Iran and the closure of the Strait of Hormuz.

But today’s analysis shows that installation of home renewables like solar power, backed by batteries and smart tariffs, can significantly soften the blow of higher energy bills to the tune of hundreds of pounds a year. However, the installation of these technologies can run up to £10,000 for a typical household, meaning it is out of reach for many.

Chaitanya Kumar, head of economy and environment at NEF, said:

“Trump’s attacks on Iran are again showing us how exposed the UK public is to energy price shocks. More and more households are turning to solar panels to power their homes. But the high upfront cost remains a barrier to millions. With energy bills about to rise, this government needs to act now to insulate households from the worst impacts, including through low or zero-interest loans, solar on subscription and accelerating the installation of solar panels on council homes. ”

Household savings from rooftop solar panels and batteries will vary, depending on the direction that rooftops face. But smart battery installation will ensure that even households with north-facing roofs will save significant amounts:

• South-facing roofs will save £823
• East/west-facing roofs will save £728
• North-facing roofs will save £602

NEF is urging the government to accelerate the rollout of solar and battery technologies to households through bringing the target to have 5 million homes with rooftop solar forward from 2030; launch the promised low-interest loan scheme for households to install low-carbon technologies at home; and encourage no-upfront-cost models like solar-on-subscription so low-income households can afford home solar power

Notes

The New Economics Foundation is a charitable think tank. We are independent of political parties and committed to being transparent about how we are funded.

Savings estimates are based on a typical UK household electricity demand of 2,700 kWh per year, consistent with Ofgem’s assumptions for a standard dual-fuel home, three bed with two-three occupants. Baseline electricity costs reflect Ofgem’s forecast for the July – September 2026 price cap period, announced today. The analysis models a representative 4 kWp rooftop solar system paired with a 5 kWh home battery across three roof types (south-facing, east/west-facing, and north-facing), with generation profiles adjusted accordingly. Modelled consumers are assumed to be on E.On’s smart tariffs that offer variable rates for peak and off- peak consumption. The figures are therefore illustrative and can vary hugely depending on the suppliers’ tariff offers.

The analysis estimates annual savings from three components: reduced grid electricity consumption from solar generation, revenue from exporting surplus electricity to the grid, and additional savings from battery storage and time-of-use optimisation. A flexible electricity tariff with cheaper overnight rates and fixed export payments is assumed, reflecting currently available smart tariff structures. Battery performance accounts for typical efficiency losses and realistic limits on how much household demand can be shifted across the day. Results are presented as annual electricity bill savings relative to the price cap and do not include gas consumption, upfront installation costs, or long-term changes in tariffs or technology performance.