UPDATE: The Feed-In Tariff is now closed for new applications. To find out about the new scheme designed to replace it, click here.
Solar PV is already hugely popular here in the UK with over 600,000 households benefiting from solar panels installed on their roofs. You might think that solar PV is made for ‘Greenies’ who dream of living off grid, but actually solar panels can provide a nice regular tax-free income too!
Under the Government’s Feed-in tariff, the homeowner is paid for every unit of electricity that is produced from the solar panels. It doesn’t matter if the electricity is used in the home or sold back to the grid – you get paid for each unit produced – guaranteeing you a return tax-free return on your investment for 20 years (the current length of the Feed-in tariff).
So why is now such a good time to install solar panels on your roof?
Well firstly the cost of the getting a solar system put on your roof is at a record low. A 4kW system that could provide you with £1,000 + per year (through energy savings and the Feed-in tariff) can cost as little as £5,000 – £6,000. That means a payback of just 5-6 years.
Another reason for going for solar now is that the feed in tariff gets reviewed every 3 months, at which point the Government can make the call whether to reduce the payments. Whatever the feed-in tariff rate is when you register your solar system will be the payment you will receive for the next 20 years. You lock in your payment – so doing it now will ensure you get a decent feed-in tariff rate which will therefore reduce the payback of the solar PV system.
Free electricity! It is worth mentioning again that it doesn’t matter if you sell you electricity back to the grid (at 4.85p / kWh) or you use it in the home, you still get paid for producing the electricity. So in our opinion it is defiantly worth using the electricity you produce to power your appliances where you can. The reason for this is that electricity costs between 10-15p / kWh to buy from the mains grid so using the stuff you produce means you don’t have to buy that unit from the electricity company so you make significant savings. Obviously the more solar panels you have on your roof the better, the ideal is a 4kW system which will be 16 panels, but even if you can only fit 8-10 solar panels on your roof, you will still witness an attractive financial return.
A couple of things to make sure when choosing your solar installer
The installers HAVE to be MCS registered – otherwise you won’t be able to access the feed-in tariff. Obviously you will still benefit from the free electricity you are producing, but it makes sense to get paid for the electricity you produce if someone is willing to do it!
Secondly a south facing roof will produce the most electricity just because of the orientation of the sun during the day. If a solar installer tries to tell you that your north facing roof is going to provide you with a huge return if you put solar panels on it, take this with a rather large pinch of salt!
Obviously we are now at the beginning of the summer, so by installing your solar panels now you will not only lock in to the higher Feed-in tariff rate (12.92p / kWh between 1st July 2015 and 30 September 2015) you will also produce a decent amount of electricity before the colder weather sets in. It is worth mentioning that solar panels don’t produce nearly as much electricity during the winter months than they do during the summer, so don’t be surprised when your quarterly feed-in tariff payments go down for the two winter quarters.
Remember the feed-in tariff is only ever going to go down as time moves forward (there were some people lucky enough to lock in a rate of 43p / kWh during 2011. So if you want to maximise your tax-free return from solar panels we suggest moving relatively quickly. The installation process itself will take just a day or two, but with all large investments we do suggest getting a couple of quotes and doing a bit of research into the install company to check they are a reputable company.
If you would like to get a quote from one of our solar PV installers across the country click on the link below – all our installer network are MCS certified so you will be able to benefit from the Government’s Feed-in tariff.
Installing Solar PV
Are you thinking about installing a solar PV system at home? We have scoured the country for the best tradespeople, so that we can make sure we only recommend those we really trust.
If you would like us to find you a local installer to help install a solar PV system in your home, just fill in the form below and we will be in touch shortly!