Solar panels and self-consumption — is it worth it in your case?

Self-consumption with solar panels is no longer a thing for futurists: today it's a realistic option for many homes and businesses. But the fact that it's possible doesn't mean it pays off equally for everyone, and a badly sized installation is an investment that takes twice as long to come back.

Let's look, without selling anything, at when it really is worth it.

How self-consumption works

Your panels produce electricity during the day. You use that energy directly at home — what's known as instant self-consumption — and, when you produce more than you're using at that moment, the surplus is fed into the grid.

For that leftover energy you receive surplus compensation (compensación de excedentes): your retailer deducts its value from the energy portion of your bill. And there are three nuances here that change the numbers and almost never get explained:

• It isn't money in your bank account, it's a discount on the bill.
• It can't take your bill to zero. The compensation is capped at the value of the energy you've consumed that month. If you produce far more than you use, whatever goes over that cap is lost: it doesn't carry over to the following month and it isn't paid out.
• The power term, the taxes and the meter rental are still charged in full. That's why a bill with self-consumption never drops to zero, however many panels you put up.

The practical consequence matters: a kWh you consume yourself is worth considerably more than a kWh you export. The whole design of an installation that pays off comes down to maximising the first one.

When it pays off most

Self-consumption performs especially well if:

• You use electricity during the day. Working from home, someone at home in the mornings, a business with daytime opening hours. It is, by a distance, the factor that counts most.
• You have good orientation. A south-facing roof with no shade gets far more out of every panel. East and west work too, with less total production but spread across more hours of the day — which sometimes fits real consumption better.
• Your current bill is high. The more you're paying, the sooner the installation pays for itself.
• You have loads you can shift to the middle of the day. Washing machine, dishwasher, water heater, heat pump, electric car. Moving those to the sunny hours is free and changes the payback noticeably.

If there's hardly anyone at home until the evening, a good part of the production will go to surplus, which is worth less. It's still worth it in many cases, but the payback is slower — and that's where you have to size the system with a cool head instead of fitting every panel the roof will take.

Shade matters more than it looks

Partial shade on one panel doesn't just reduce that panel's output: it can reduce the output of the whole string it's connected to. A chimney, an aerial, a tree or the building opposite in winter — when the sun sits lower — can cost more than anyone expects.

A serious installer carries out a shade study across the year before quoting you a figure. If somebody gives you a quote without having looked at your roof, be suspicious.

Batteries: when yes and when no

A battery stores the midday surplus so you can use it at night. It sounds perfect, and in some cases it is — but it makes the installation considerably more expensive and doesn't always speed up the payback.

• It makes sense if your consumption is mostly at night, if you get frequent power cuts, or if you want to depend less on the grid.
• It usually doesn't pay for itself if your profile is already a daytime one: there, every euro put into a battery returns less than one put into panels.

You can start without a battery and add one later, as long as the inverter is compatible. Ask about that before you sign.

What return on investment means, and how to calculate it

The key question isn't "how much does it cost", but how many years it takes to pay for itself. To estimate that you need four figures:

1. The total cost of the installation, including VAT, legalisation and commissioning.
2. The expected annual saving, which is instant self-consumption (valued at what you pay per kWh, including tax) plus the surplus (at its own, lower price).
3. Any grants and reductions you're entitled to: regional subsidies, reductions in IBI (the property tax) and ICIO (the building works tax) that many town halls apply, and the tax deductions currently in force. They vary a lot depending on where you live, and they change from year to year.
4. Maintenance, which is low but not zero: cleaning and the occasional inspection.

Divide (1) minus (3) by (2) and you have the number of years. With sensible sizing, many domestic installations pay for themselves within a period that makes sense for an investment of this kind, and from then on the energy they produce is practically free for the rest of their working life — panels usually come with 25-year output warranties.

Be wary of round estimates. A payback promised without knowing your real consumption, your tariff and your orientation isn't a calculation: it's a brochure.

If you live in a flat: collective self-consumption

You don't need a detached house. Collective self-consumption lets several consumers share a single installation — on the roof of the block or on a nearby building — splitting the production according to agreed coefficients.

The rules have been relaxed over time: the radius within which consumers can be linked has been widened, and the majorities required in a residents' association have been lowered compared with what was demanded at the outset. Since this has moved several times in a few years, it's worth confirming the current position with your installer and your regional government before taking anything for granted.

The step almost everyone skips

Before thinking about panels, make sure your current tariff and contracted power are already in order. There's no point sizing an installation on a bill you were overpaying: payback calculations are made against what you pay today, so if your bill is inflated, the payback comes out artificially good and reality turns up later.

Sort out the contract first:

• Check that you don't have more contracted power than you need.
• See whether your tariff makes the most of the sunny hours: with self-consumption, time-of-use pricing works the other way round, and we explain that in electricity prices by time of day.
• Check which retailer compensates your surplus best: they don't all pay the same, or on the same terms.

At luzgasia we start right there: you upload your bill, we analyse it and tell you whether your current tariff is competitive and where your margin is. It's the first step, and it's free, with no strings attached and no sales calls.

Analyse your bill now and start from solid ground.