Initial Investment
The time it takes to recover the costs of a new solar panel installation depends on many factors. Firstly, the cost of the initial investment. A mid range solar installation for a single household would be one - two kilowatts.
An installation of this capacity would cost between approximately £5,000 and £6,000 as of 2011, plus and additional £1,000 for installation.
Government subsidies into renewable energy, couples with a decrease in the cost due to more widespread production will most likely see these figures declining over the next few years.
Power Generation
Secondly, the speed of which the solar array generates electricity will affect how long it take to recover the costs of the initial investment. A 1 kilowatt array will produce approximately 850 KW/h per year in the United Kingdom, based on historical data. However this will vary from year to year based on meteorological conditions. The position of your solar panels and the
Current Costs
Thirdly, the cost recovery will greatly depend of the current cost of electricity, and the amount used by the household. The Feed in tariff scheme, which obliges energy suppliers to pay a set amount per Kilowatt generated results in an even faster cost recovery time frame as the southern United States at around 6-7 years for the average installation. The current upward trend in commodity prices which is resulting in increase in electricity prices means that the time frame may actually be shorter than this. even a 1 cent per kilowatt increase in the cost of electricity would reduce the cost recovery time by 18 months.
Nature of Solar Power
The nature of solar power means that the power saved is during the day, when the cost of electricity is highest to to higher demand, although this may not apply is the electricity package does not including variable rates. Most of the household power that is drawn will be during the night time, when variable rates are at their lowest.
Comparison
The average cost recovery time frame will vary from approxiamtely 19 years in the southern United States, up to 30 in the northern United States and the United Kingdom
