Are Solar Panels Worth the Investment?May 27, 2014
Energy prices have risen phenomenally over the past few years, and many people are now looking for ways to reduce their bills and their dependence on the big energy firms. One common way to do this has been to invest in solar panels, either for energy generation or heating. However, with the removal of many subsidies and incentives, you may now question whether installing panels will give you the right return on your investment of money and effort.
As with any home improvement or investment, solar panels come with a range of advantages and disadvantages. It’s important that you weigh these carefully before making your decision.
Solar panels can provide a large proportion of your electricity needs for minimal expenditure in maintenance. Panels are measured by their maximum output in kilowatts (kWp), and a 3.5kWp system can generate an average of 3,000 kilowatt hours of electricity annually. This is enough for around 75% of an average household’s needs.
Prices for a system will vary, but the Energy Saving Trust suggests that this size of system, or even a larger 4 kWp size, should roll in at between £6000 and £9000 inclusive of VAT. These costs can be offset against savings on your fuel bills under the government’s Green Deal, so you won’t necessarily have to pay this in advance.
Generating electricity by solar power also prevents the emission of around two tonnes of CO2 each year, which could add up to a significant improvement in environmental emissions for your household, letting you easily do your bit for the planet while saving money on your energy bills.
If you do manage to generate more electricity than your household can use, you’ll be able to sell it back to the national grid. While you can meter exactly how much you’re selling back, most households with small systems, such as the 3.5kWp one referenced above, are simply deemed to sell 50% of their production to the grid, and given a credit to reflect this. While the rate is currently less than 5p per kWh, far less than you’ll pay for each unit of top-up power you buy, it’s still a nice bonus, particularly if you can time your energy usage to ensure that you’re actually using most of the power you generate.
While there are no longer any grants available for installing electricity-generating panels, a small grant is still available for people installing heating systems based on renewable energy such as solar panels. Called the Domestic Renewable Heat Incentive, it provides eligible installers of such systems with quarterly payments for seven years, subject to the system being kept in good working order with appropriate Green Deal certification.
In order to apply for government financing or grants, a lot of conditions must be met, which many people find arduous and off-putting. Additionally, even when these conditions are met, payback times are not short, and many people feel that they will not see a reasonable return on investment over the period.
Additionally, only certain solar panel companies are accredited under the Microgeneration Certification Scheme (MCS), and only systems installed by these companies can be added to a feed-in tariff. Some people believe that this limits consumer choice and creates a barrier to further price reductions on solar panel installations.
While modern solar panels are effective in many types of weather, houses do need to be able to access daylight for a reasonable proportion of the day to truly benefit from these systems. This means that the panels may not be appropriate for properties that are overlooked or shadowed in other ways by surrounding features, as the amount of energy generated will not approach the kWp rating.
The most effective type of solar
panels are those set into the roof rather than placed on it. This means that in order to get the most out of your system, major building work and the associated costs and disruption are necessary in order to replace the relevant portions of the roof.
This also means that there is a potential point of failure for your roof’s weatherproofing where the solar panel meets your roofing materials. Although this risk can be mitigated by using a reputable and experienced installer, this can again add to the initial and ongoing costs of the system.
Overall, the financial benefits of installing solar panels are sound, even after government removal of subsidies and a lowered feed-in tariff rate. However, these financial benefits only apply if you plan to live in the property you are fitting the system to for many years. Solar panels are not really transferrable, and the initial payback period is nearer a decade than a year.
Additionally, there is a level of inconvenience attached to making applications for funding schemes, as well as physical upheaval associated with installation, that might make solar panels less suitable for you if you are not settled and intending to remain in a property long-term.
However, if you are settled in your home, there are far fewer reasons to keep paying the energy companies full price for their products when you can fulfil your own energy or heating needs simply and with minimal ongoing maintenance by installing a single set of equipment and using renewable resources.
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