Ok, so you’ve noticed that solar is popular at the moment and you’re hearing from your friends, family and co-workers that it’s a great investment. But, is it a great investment for you and your household?
What you will need to work out is:
- Whether or not it’s a good investment in your circumstances
- How long it will take to for the system pay for itself before you start seeing a benefit, financially
- How the returns on the initial investment compare to putting your money into shares or even just putting it into the bank
- If you’re paying for the system on finance, you want to be sure that the return on your investment is quite a bit more than what you’re paying in interest or else, what’s the point?
There are several websites which will allow you to input details and obtain an indication of expected output and return on your investments.The Energy Saving Trust website is a good resource to use, providing up-to-date information on the feed-in tariffs and payments. You can also use the solar savings calculator on this site.
An average UK example: (please note these figures will change from 1 January 2016 if the Government slashes the feed-in tariff by 87%)
Every solar powered home is different. But let’s take an average semi-detached house, South West or South East facing with a roof angled at 40 degree with no shading on the roof and ample room for a 3kWh solar panel system. The average cost of installation would be approximately £6,000.
Between the annual income from the electricity generated (Feed-in tariff), the income from exporting unused electricity there would be a reduction in the annual electricity bill. So an average installation would deliver to its owner roughly £500 per year of value meaning that the installation will ‘pay-back’ in about 12 years and turn a profit of more than £4000.
This could increase if and when the cost of “bought-in” electricity goes up.
The Energy Saving Trust website is a good resource to use to obtain an indication of expected outputs, returns and explains the feed-in tariffs and payments well.
To calculate your approximate costs and savings for your home you can use Energy Savings Trust’s Solar Energy Calculator.