Solar PV panels – are they still worth it?
The benefits of solar energy are obvious – free sunlight can cut your electricity bills, you can be paid for the electricity you generate (even if you use it) and you can sell surplus electricity back to the grid. Most importantly perhaps is that it is green and no harmful greenhouse gases will be released into the atmosphere during energy production.
Yet do the recent government cuts in the feed-in tariff negate any of the above benefits? The feed-in tariff for solar PV panels will reduce again from 1st November, by 0.54 pence / kW. In this blog, we will look at the pros and cons of installing solar panels on your house and ask – is it still worth it?
Solar PV installation costs
The cost of installing a solar PV system has dropped significantly over the last year – in May this year a typical house requiring a 3kWh system would be set back £7,700. It is now possible, 5 months down the line, to get the same system for under £6,000.
Already this year we have seen the FIT rate reduced from 43.3p to 16p and from 1St November it will reduce again to 15.44p. However, you are still paid 4.5p for each unit of electricity that you don’t use and export back to the national grid, up from 3.2p.
What kind of Return on Investment can I get on a Solar PV installation ?
With nearly all energy suppliers increasing their prices over the last few days, our attention returns to solar panels as another option to beat the energy price hikes. Solar still provides a return-on-investment of about 8%, which is higher than all the high-street banks, and your installation can be paid off in about twelve years. Not only is it a green option, it can be seen as as a serious investment and a way to avoid the inevitable further rises of energy bills.
What if I choose to sell my house?
We live in tough economic times and the housing market remains a buyers’ market. Estate agents are desperate for those extra features which will separate one house from the next. Solar panels are most certainly a plus point. House prices will probably follow those in the USA, where solar panels are currently more prevalent. Research by the US National Renewable Energy Lab has shown that houses powered by solar energy are likely to sell for 17% more than those powered by non-renewable fuel. What’s more, they are likely to sell 20% more quickly when put on the market.
Furthermore, any individual who buys a house that is already fitted with solar panels benefits from the increases that the installation brings to a homeowner, as the ownership of the panels and the Feed-In Tariff – where selling surplus electricity back to the national grid results in a profit – is transferred with the property. Also, if the homeowner makes any profits, they are tax free (around £900 a year for a typical 3kw system), which is a huge incentive to prospective buyers, especially as they will not be offsetting any initial installation costs. In an age where we must look to offset our carbon footprints; in an age where many activities such as travel contribute significantly to greenhouse gas emissions, individuals are looking for ways to make their way of living more environmentally clean.
So in conclusion, with installation costs going down, the value of your property increasing AND the high yields on investment, solar panels still reflect a very good investment for your home. If you have a south facing roof and are not planning to move in the immediate future, you would be mad not to! You can visit our solar section to find out more.
These figures have once again changed, please see the latest update here.