Are Solar Panels Worth It?

In our latest article, we take a look at whether investing in solar panels is actually worth it and will generate an attractive return on investment.

The History Of Solar PV In The UK

When solar panels were first introduced into the UK during the mid 1990’s, they were often seen as a luxury that was unaffordable for most. In addition, the performance of early interactions, a generous Government incentive known as the Feed In Tariff, was implemented in 2010 to help encourage homeowners to invest in solar technology. The Feed In tariff enabled homeowners to receive a rebate for up to 25 years per kWh of energy produced by the solar panels. The rebate could generate significant annual income for those who had solar panels installed. Not only was the Feed In Tariff based upon the number of kWh generated by the solar panels, it also enabled homeowners to use that energy in their home for free. The FIT scheme was successful in bringing the demand for solar panels into the mainstream and in turn, it helped the cost of Solar PV to reduce over the years whilst the performance of the panels increased with ongoing development. In 2021, the FIT scheme ended for new applications and the solar industry started to decline as demand started to fall.

The 2022-2023 Cost Of Living Crisis

The hangover from the Covid-19 pandemic coupled with the illegal war in the Ukraine saw the cost of living spiral throughout the world. In countries like the UK where there is strong reliance on imported energy from other countries, the cost of energy rose exponentially to levels never seen before. This inflationary phenomenon, not seen for 40 years, helped to drive desperate homeowners towards renewable technologies in order to help control the cost of powering their homes. Where a 12-15 year payback for Solar PV may have been too much for the average homeowner to stomach before 2021, the rising cost of energy has reduced the payback period to less than 8 years for many who whose appropriately sized Solar PV systems, coupled, where needed, with battery storage.

The Cost & Benefits Of Solar PV In 2023

Without the incentives of the now defunct Feed In Tariff, Solar PV has finally found its feet with payback for the average system somewhere between 6-8 years. This is a strong return on investment when considering the life expectancy of most Solar Panels is at least 20 years. Whilst the inverters and batteries may only last around 15 years, there’s still ample time to recoup the initial outlay and make sizeable profits – especially if energy costs keep rising. Although it’s no longer possible to claim FIT payments for exporting to the grid, there is a replacement scheme known as Smart Export Guarantee. The SEG is a guaranteed payment of up to 6 pence per kWh that you export to the grid. The trouble is, when you are buying back from the grid at 30-40 pence per kWh, it’s better to avoid exporting altogether.

In 2023, the average sized 4 kW Solar PV system accompanied with 5 kWh of battery storage, will set you back between £9,500 and £10,500 fully installed. The bulk of the cost is in the mobilisation of an install team, scaffold and access etc. It can become more cost effective to choose a larger system with the price increasing at a lower rate, for example, we tend to install 5 kW Solar PV systems with 10 kWh of battery storage for around the £12,500 mark. In almost every circumstance, we recommend battery storage due to the potential for strong PV generation during the day when energy consumption is at its lowest. The battery storage system will enable you to run your home from stored energy well into the evening before the grid kicks in to power your home.

How To Buy Solar PV

It’s a large investment and not one that should be considered lightly. As with any purchase over £1000, we recommend that you seek 3 quotes before choosing which company to go with. Remember, the cheapest price shouldn’t always win. Most bona-fide Solar PV companies will be MCS Certified – this is a hallmark of compliance and it means that your install will be certified. Many energy companies will not agree to the Smart Export Guarantee without an MCS Certified install. A good Solar PV supplier should also be able to advise you on potential payback periods and clearly identify the pros and cons.

Whilst many different suppliers operate differently, we prefer to put together the initial proposal via satellite imaging of your house and from the energy consumption data that you can supply. This method enables us to offer clear and concise potential costs along with the system proposal prior to visiting your property for a survey. Unlike many of our competitors, we don’t employ salesmen, we employ surveyors and technical specifiers. We’re not a fan of sitting in your home, forcing you to sign up there and then without having provided you with a robust reason to invest in the technology and to choose us as your supplier!

Contact us today.

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