We are slowly but surely moving into an age of alternative energy. There is plenty of talk about it, but how many people do you know personally who have installed some form of eco-friendly energy supply in their home? I’m willing to bet that it’s a fairly low figure at the moment, although I believe this situation will start to change more rapidly once more of us have got our heads around the value of changing to a new form of energy, from protecting the planet to adding value to our homes and saving on utility bills.
Solar panels are the most accessible method of using alternative energy, even though that does sound pretty ironic in the UK where sunlight often seems in scarce supply. Happily, solar panels can find and use the sunshine hidden beyond those clouds, so let’s take a look at the financial advantages of installing solar PVs for the best all-round investment.
Reasons to invest in solar power
First, as you’re probably aware, electricity bills are not getting any lower and the main way of keeping them down is by switching suppliers. This is a variable experience and requires time and effort searching out the best deals. Experts say that the cost of electricity is unlikely to drop and indeed, it is more likely to get more expensive. With an eye to this future, there are homebuyers out there who are actively looking for properties that already have solar panels installed and are willing to pay a higher price for that convenience. Plus, every home now has to produce a valid Energy Performance Certificate, (EPC) – solar panels raise your EPC by at least two grades, and that could equate to a property value increase of at least £16,000 on average.
The cost of installation
One of the elements that held a number of people back from installing solar energy was the cost. However, the good news is that prices are falling. For example, a large 4kW system is now around £6,000 whereas in 2010 it was double that amount says the GreenAge website. Plus you get paid for using it! Ok, this ‘feed-in tariff’ (FIT) has decreased recently to some 14p for every unit of electricity used, but if you install now, you’ll receive this payment until 2036. This lower income is offset by the reduced cost of installation, so you’re still a winner.
Take the story of the Wares family in Scotland who installed solar PVs in 2012 at the point when the price of panels dropped by almost 50% and just before the FIT was reduced from 25 years to 20 years. They earn around £800 per year for the energy they sell to suppliers. If they keep producing electricity at this level they will make £20,000 over the 25-year period, which is three times the amount of the original outlay for installation.
There are firms offering ‘free’ panels but do be aware that they will insist you sign a 20-year contract and they will take all your FIT tariff and electricity export payments. So, it’s not so ‘free’ after all!
Investing in solar panels
Which?, those veterans of consumer choice and rights, suggests that the best way to pay for solar panel installation is in full and upfront. It warns about the liabilities of remortgaging or taking out a loan to pay for it and suggests you calculate the returns you will make on a solar panel installation vis-à-vis your loan repayments. It also suggests that you follow inflation trends as that will give you a good idea of the returns you’re likely to get on your solar panel investment in terms of FIT, and then measure it against the increases in the cost of your ‘standard’ electricity bill, which is forecast to increase annually by 2.6% to 2030, according to figures from The Department of Energy and Climate Change.
Compare solar panels and installers
If you’re looking for more help before making a decision then The Eco Experts provide an excellent comparison site where you’ll find everything you want to know about solar energy, including costs to government grants and a variety of tools to calculate savings. You’ll also find a bundle of tips about the best installers and there’s a nifty tool where you enter your postcode and the site sends back quotes from the leading professional installers in your area.
You’ll find that views about property values and solar panels varies widely, but it is certainly worth investigating what advantages the sun’s rays can bring you all year round, even when you can’t quite bask in them yourself.
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