Investing in Solar Panels: Is Now the Right Time?
Millions of homes across the UK will be benefiting from generous payments and low energy bills if the words of Amber Rudd, new energy secretary, are anything to go by. Rudd has promised a novel solar revolution around Britain.
Solar energy has come full circle, considering just recently it was considered a niche only thought about by the wealthy, tech geeks and those attentive to anything eco-friendly. However, the cost of solar panels has gone down so that solar energy is seemingly a viable choice for millions of homes seeking to save money and make the most of incentives from the government. In fact, households could benefit from ten percent annually on the funds invested in solar panels.
As the reality of the new government was sinking in, uncertainty on the future of incentives for homes using renewable energy was very high. However, Amber Rudd, the incoming minister for energy, has fervently pledged she’s committed to energy from the sun. She indicated about unleashing a whole new solar energy revolution. She noted that while about a million people were already using solar panels the number should increase. Rudd hopes to see more lights on at the same time decreased carbon emissions whilst ensuring consumers save a lot of money from their power bills.
In 2010, having a functioning solar system on the roof was worth about £15,000 but in 2015 a 4kW system, the largest, cost £5,000-£8,000 as per the STA (Solar Trade Association). If you fit a £7,000 system and reap the £700 estimated annually, you would also benefit from decreased energy costs, giving you an annual return of 10 percent. To maximise on this, you might want to pay upfront while remembering that taking out loans to cover the installation costs will decrease your return.
Solar panels are able to help in saving money in a number of ways. The first method is generation of electricity in homes that essentially decreases your energy bills. However, this saving does depend on the time of the day and electricity used. The Energy Saving Trust indicates that on average, households can save £100 or more annually. Homes that use their tumble driers, washing machines and dishwashers as the panels generate power could save about £175 annually.
It’s also possible to save from feed-in tariff, essentially funds the energy supplier pays for energy generated by the panels and it’s a unit set amount. For instance, 13.39/kWh is the current feed-in tariff that a household will produce and as per the RPI (retail prices index) it can increase annually. For instance, a household in South-East England with a roof facing towards the south with a 4 kW system can make £510 annually, while a house in Scotland’s Sterling with the roof facing south could make about £425.
The third way of saving from solar panels is through export tariff-payment received from selling any additional units not in use to the electricity supplier. With the payment increasing with retail prices index and currently at 4.85p/kWh, it means a household in South England can make £90 while another in the North can receive £80 every year.