According to a recent Ofgem report energy companies are making an annual profit of £75 from every household in the UK and the prices look set to rise again as Scottish Power become the first company to announce a second price increase this year and other companies look set to follow. Studies show that families can expect to pay up to £270 more for their energy in 2011 than they did in 2008. Combine this with the Government drive to reduce carbon emissions and source 15% of its energy from renewable sources by 2020 and then home solar energy seems like a really neat solution.
So why aren’t more people switched on to Solar?
An independent survey, conducted by Opinion Matters, reveals that over 60% of Britush homeowners say that the cost of solar panels and the installation fees is the main reason preventing them from adopting a solar powered energy supply. The research shows that almost 2/3 of homeowners do not believe that solar panels are affordable. A further 7.5% state that solar panels won’t make any significant reduction to their energy bills.
Other reasons include disliking the appearance of solar panels, not understanding how solar panels work, and concern that solar panels may devalue a property.
This research shows the Government and in particular the DECC are failing to communicate effectively to the public how Solar PV Power can work and how to calculate the potential earnings and savings that are available under the current Feed in Tariff scheme.
The Feed in Tariff scheme pays 43.3p for every kW of energy produced even if this energy is used and an additional 3.1p for kW of surplus energy produced. The average household can expect to earn around £836 a year tax free in addition to electricity savings of around £150. This adds up to an income of £986 a year. Depending on the cost of the solar panel system installed, homeowners can expect to start breaking even within 9 or 10 years and then begin to turn a pure profit.
Solar panels present a very strong investment opportunity with potential ROI as high as 10% at a time when savings in banks are not accruing any interest. Feed in Tariffs have been guaranteed for 25 years so there is no danger of the scheme collapsing before the solar panels have begun to pay for themselves.
As energy prices continue to rise, more should be done to inform the British public about the financial virtues of solar energy, not just the environmental ones.