Full disclosure, this blog post comes with a healthy dose of bias. We love solar panels. We install them. We upgrade them. And, like our clients, we enjoy free electricity from them. We could honestly talk about them all day. Or more specifically, why they're so great, the benefits they can bring and why we believe that every building in the country should be covered in them (we can probably give Big Ben a pass - too pointy).
Unfortunately, there are some out there who still just don't realise how great solar panels are, or what they can do for you, which is why we put this snazzy list together. So if you've got 5 minutes, take a seat, put your feet up, and join us as we discuss the top 6 reasons why installing solar panels is one of the best investments you can make right now!
1. Reduction in Carbon Emissions
Lets start with the biggie shall we? We haven't been taking the best care of our world so far, and unless the Mars colonisation efforts are moved up a few hundred years or so, we're going to be stuck with this planet for the rest of our lifetimes. Luckily, there are plenty of clever clogs out there working on renewable energies, and solar panels provide us with an affordable, clean, green energy supply, and one of the easiest ways to reduce your carbon footprint. Once they're set up, there is literally nothing about solar panels that pollutes Mother Earth, they just sit up there on the roof, happily basking in the sun (which will thankfully be around for at least a few more billion years).
Now some of you may be thinking '...but isn't energy used when creating Solar Panels?", and you'd be completely right. There is some pollution produced when the panels are first created, such as getting hold of the materials in the first place and the actual manufacturing process. This is called Front Loading, as their lifetime carbon emissions are all produced at the very beginning of their lifetime. The good news though, is that these lifetime emissions are small, and are recouped in first few years of their actual operation. And since they can work for over 25 years, that's a long time to be producing emission-free energy!
2. Feed-In Tariff
"But the government took away our tariffs" we hear you cry! Well actually they didn't. The Feed-In Tariff (FiT) is still alive and well, and still perfectly capable of offsetting the cost of your solar installation. If the Feed-In Tariff is new to you, it's a UK government scheme that pays you to generate electricity using an eligible green technology installed by an approved installer (pssst... we're one of those). The idea is to encourage more people and companies to make the move to a more sustainable future by providing a financial incentive.
The FiT has often been a point of confusion, so let's break it down into the 2 main components:
- Generation: For every unit of electricity that you produce, you will be paid a fixed rate by your energy supplier. It doesn't matter if you use the energy or not, you will get paid for it. Once your system is set up and registered, you'll be able to receive payments for up to 20 years at the rate you signed onto. This means that any future changes to the rate will not affect your payments. They're even annually adjusted for inflation.
- Export: On top of your generation tariff, you'll receive a further payment for any unused electricity that you export to the grid. Eventually, export meters will be installed that measure exactly how much you're exporting, but until then it is just assumed that domestic installations (or any others below 30kWp) export 50% of all the electricity they generate.
So if you were to install a solar PV system, for every unit that you generate you receive a payment based on the generation tariff, and it's assumed that you export 50%, so you receive a further payment based on the export tariff. You can even install an export meter if you think that you'll be exporting over 50% of your generation, that way you can earn even more from your system.
So let's do a quick bit of maths (bear with us). Let's say you have a home near Plymouth, which is in a good zone for sunshine (or irradiance if you want to be fancy), and you want to install a 4kWh, 12-panel SunPower system on a south-facing roof. That could produce up to 4,300kWh of electricity per year (enough to completely cover the average home's energy requirements). As of March 2018, the Generation Tariff is 3.93p/kWh and the Export Tariff is 5.03p/kWh, which means that from your 4,300kWh production, and the assumed 50% export rate, you could earn £275 annually, or over £6,500 across the 20 year course of the scheme when you factor in inflation. Not bad at all for something that just sits on your roof and minds its own business! And that's not even the best part, read on to find out how your electricity bill savings could dwarf your Feed-In payments!
Be aware that Feed-In Tariff rates can change (we'll cover that in a minute). It's best to get the latest information from the Energy Saving Trust at the link below.Latest Feed-In Tariff Rates
3. Reduction in Electricity Bills
For years, the discussion over solar panels has been dominated by the the Feed-In Tariff. Perhaps there's just something that people enjoy about the idea of receiving payments from the big energy companies that are usually trying to squeeze every penny possible out of them (although we're not biased in any way). However, as the Feed-In Tariff rates have gradually been reduced over the years (renewables were more successful than anyone had imagined!), the real benefit of solar panels has proven to be the reduction in energy bills. This has been further compounded by the big energy suppliers repeatedly raising the cost of electricity, leading to higher bills for everyone.
One key thing to consider here is actually how the cost of solar PV installations has changed over the years. The FiT rates used to be so high because the installations themselves were more expensive; a typical 4kWh system could cost around £14,000 back in 2010. Now a more efficient system can be installed for as little as £4,500, with smaller (but still very effective) systems available for even less at around £3,5o0. When you consider the reduced FiT rate, but also the hugely reduced installation costs and rising electricity prices, there's never been a better time to go solar!
Installation Cost Of A 4kWh Solar PV System By Year (£)
Now let's head back to the maths (sorry in advance). Previously our 4kWh system in Plymouth earned us a respectable £275 per year in FiT payments. That's not bad, it will pay off the system over it's lifetime and generate a small profit. But when you factor in the electricity bill reductions, things get a lot more interesting. The average cost of electricity in good old Blighty, as of March 2018, is 16p/kWh. Our PV system was generating 4,300kWh annually, so if we were to use all of that, thereby not paying to draw from the grid, that's a saving of £680 per year! Combine that with the Feed-In Tariff, and compensate for inflation, and that's a combined payback of over £25,000 over 20 years! And that's only 20 years; quality panels can keep generating for even longer than that, so you'll keep saving on your bills even though the FiT payments will stop.
Solar PV Lifetime Payback - Where You Make The Savings (£)
As you can see, the electricity savings far outweigh the Feed-In Tariff payments, in fact they make up over 75% of the estimated payback in this scenario. Obviously, we have to take these results with a big pinch of salt. We've made multiple assumptions, like that you would use every last drop of electricity that you produce (although this is possible with a battery storage solution - read about them here), we've assumed some electricity price hikes and we've also assumed a perfectly south-facing 100% efficient system. However, the fact remains that with a good solar PV system, you'll receive some nice FiT payments to offset the cost of the system, but the real benefit is in the huge reduction that you'll see in your bills, and we think that should be enough to put a big smile on anybody's face (unless you own a coal plant).
Take A Breather...
That was a lot of content that we just covered, and a whole lot of maths (eeewww), so take a breather, and prepare yourself for the next half, which has hardly any maths at all (we promise!). We've covered the big benefits of solar and we're on the home stretch. Now just a few points on the smaller reasons that make investing in a solar PV installation such a great idea right now.
4. More Energy Aware
This is a bit of an odd one, but stay with us! Until you're actually producing your own electricity and understand precisely where it comes from, you can never really appreciate how you use it within your own home. You probably just switch on your appliances as and when you need them, which is fair enough. Pretty much everyone else does as well. But when you've got solar panels up on your roof, and a lovely little smart meter that tells you exactly what you're producing and when, how much you're exporting to the grid and how much is going into heating your hot water (yep, solar panels can do that), you'll definitely start to get a little bit more protective of your electricity. And that makes perfect sense. It's assumed that you're exporting 50% of everything you produce, so you might as well use 100% of your generation, and then you still get all the FiT payments, plus the greatest possible reduction in your electricity bills. You could even run your property for free if you're smart about it!
Let's look at a scenario (no maths we promise!). At the moment you might wake up in the morning and put the dishwasher on, or maybe you put it on over night. That's fine when you're drawing from the grid, but if you've got solar panels, they aren't going to be producing very much at those times (again, effective battery storage can solve this). So instead, you'll find yourself setting the dishwasher to run in the middle of the day, when the sun is the highest and your panels are generating the most electricity. Meaning that you get sparkling clean dishes for a fraction of the price you'd normally pay.
And this applies to so many things that you may find that your whole domestic routine changes to suit a greener and more efficient lifestyle. After all, if you can run your entire property for free and still get FiT payments, then why not?! The added bonus here is that you'll also start to learn which appliances draw the most electricity, which will help you to further cut back on your energy use. Think you can trust the kettle? Think again!
5. Free From Supplier
This one usually feels especially good. Remember all those times that your energy supplier decided to put up tariff prices to "maintain an effective service" while also suspiciously increasing their profit margins and bonus packages? Well you don't need to worry about that anymore! You're your own utility provider, and that means your property will be on the same low rate for at least the next 25 years (unless the sun starts charging us for energy).
Piece in the paper about energy price hikes? Skip to the comics. Letters coming through the door from comparison sites? Chuck 'em in the fireplace. Neighbours complaining about "how expensive it is to run their luxury foot spas"? Laugh in their faces (politely)! You made the smart decision to get solar panels, and you don't need to worry about any of it.
6. You're Already Spending The Money
And finally, we get to the last reason why solar panels are an amazing investment. If you haven't already been convinced at least a little bit, this mind-blowing, world-rending, earth-shattering realisation will surely bring you around to the right way of thinking. YOU ARE ALREADY SPENDING THIS MONEY. You are already spending thousands of pounds, paying big energy companies to provide you with electricity (unless you live an electricity-free lifestyle, in which case we applaud you but question why you read this entire list).
The average house in the South West pays approximately £650 per year on electricity bills (sorry the maths is back). That means that in about 7 years, you will have spent £4,500, the same amount that a 4kWh solar panel system can be installed for. But that money is gone; it isn't making you any money back, it isn't going to give you a return. It is just gone, sat in someone else's pocket. Why not invest now, and then not only could you be completely self-reliant, you'll also have the peace of mind that comes with knowing that your investment will actually give you a return. You will make a profit, and it will be a good profit at that.
In fact, let's dive back into the maths a little bit, but only a single chart this time (whoop!). Let's say that you have £4,500 to invest, and you have three options: a high-interest current account 3% interest rate); a higher rate, but higher risk investment (5% interest rate); or a solar panel installation (lovely return, nice and reliable). If you put your money into each of these, which one do you think would give a greater return after 20 years? Spoiler alert! It's the solar panels, which is not surprising in the slightest. Take a look at the beautiful chart below to get an idea of just how much of a better return it actually is.
Estimated Annual Payback For Multiple Investment Options
So once again, it's pretty obvious who the big winner is here. The solar panel installation comes out on top, making roughly twice the annual payback of the high risk investment, and way more than the measly current account. Another bonus with the solar panel installation (as if there aren't enough already), is that you get access to that money year on year; you receive your payments and you save what you don't spend on electricity. So you can spend that money year-on-year and and it'll keep on coming. With the other investment options, you can only touch that money at the very end of the 20 years if you want to see any real growth, and where's the fun in that?!
So What Are You Waiting For?
Well there you have it, 6 reasons why solar panels are an amazing investment. They'll power your property, reduce your carbon footprint, save you buckets of cash, make you energy aware and give you the freedom to laugh in the face of anyone who complains about their energy bills (but we probably wouldn't advocate that).
So why not start your green energy adventure by getting in touch with us and finding out just how much our renewable technologies could save you and the world. We offer completely free, absolutely no-obligation site surveys and quotes, as well as helpful, friendly advice. So what are you waiting for? Let's build your greener future today.
One Last Word...
We have done our absolute best to make the information in this post as accurate as possible, but as with all things, there is a degree of variation. We have used relatively conservative estimations in our calculations, and low inflation values, but under no circumstances should the examples in this post be taken as an absolute indicator of solar panel performance with regard to your own property, and we cannot be held responsible for any decisions made by anybody based on the information in this post alone. We are, however, completely confident in solar panels as a technology, and we do genuinely believe that in almost every case they are a viable, profitable solution.
If you would like a greener future, and think that solar panels may be the technology for you, please do not hesitate to get in touch. We carry out a thorough site survey for each one of our clients, and we generate a customised payback estimation report for each property that details exactly how much you can expect to generate and receive in payback.
Thank you very much for reading. We hope we've given sufficient evidence to explain why we're so solar crazy!