How You Can Make Money From Solar Energy
Most people are aware that solar energy is better for the environment than traditional fossil fuels. It produces no air or water pollution and neither does it emit greenhouse gases. But how many realise that there is another huge benefit to be gained from this unlimited resource that’s already being called the ‘energy of the future’?
That added advantage is found in its money-making potential - not just for the companies that manufacture and install the systems but for homeowners too. Solar power is still a relatively young science and therefore quite expensive. Like all new technology, cost is gradually falling but for many homeowners the high price tag of installing a typical solar panel system remains a major obstacle.
The result is that a range of incentives has been created by the government and other interested parties to help bring a solar solution within easy reach of the average homeowner. Now the smart ones are discovering that not only are there long term financial benefits from installing solar panels but very good reasons to take action sooner rather than later.
This book is focused on helping home and commercial property owners optimise their income from the installation of solar panels. It does this by explaining, in simple terms, how to take advantage of this technology and use the incentive schemes available. If done properly, individuals will not only be able to recoup the cost of the system and enjoy big savings on their utility bills, but they will also earn an ongoing source of passive income from all the electricity generated by their system and from the excess that can be exported to the grid.
Solar technology uses terms that are not common in everyday use and some that are quite unique to solar technology. For example, solar panels are sometimes referred to as PV modules. 'PV' is an abbreviation of the term ‘photovoltaic’ and simply refers to the process by which sunlight is converted into electricity. You will find these terms and their explanations in a glossary at the back of this book.
A common misconception is that solar panels need direct sunlight to operate. In fact, as long as they have sufficient exposure to daylight they will continue to produce energy in cloudy, overcast and, to some degree, shaded conditions. They take the energy generated from daylight and convert it into a direct electrical current. In order for that current to be suitable for use in the home, it has to be transformed into an alternating current via something called an inverter, all of which will be covered in the following chapters.
The location, positioning and the amount of shade experienced daily from nearby trees and buildings all affect the efficiency of the panels and, therefore, the income that can be expected so we will be dealing with all of these issues in order to discover how to maximise output and income.
There are several ways that money can be generated through the installation of solar panels. The most obvious is from the savings on utility bills. With electricity prices set to continuously rise, this alone is a big incentive to go solar. Then there is the Feed In Tariff Scheme (FITs) that allows the homeowner two methods of making money from their solar system. The first is through ‘generation’ that gives an income for every unit of electricity produced, whether used by the household or not. The other is via ‘export’ providing ongoing income for any excess electricity that can be diverted to the national grid.
There are tools available on the Internet that will help you to find out fairly quickly what your return on investing in solar panel technology will be. To get the most accurate calculation for your individual situation, you need to know the answers to a few questions relating to your location, property and household requirements. You will find plenty of information in this book that will not only enable you to answer those questions but will allow you to calculate your return for yourself.
There are a few things to weigh up when deciding if being part of a scheme like this is for you and lots more to think about once you’ve decided to proceed. It’s not as difficult as it first seems but a lot depends on personal circumstances. What was suitable for a friend or relative may not work for your location and household requirements.
This book will take you through the thought and planning process, step-by-step. It will guide you through the information available and help you identify the options most suitable to your situation. You will be shown how the Feed In Tariff works and how you can maximise its benefits. You will also be given help to calculate your return on investment, revealing hidden factors that could greatly impact the return you can expect.
There are many types of solar panels available and it’s a good idea to know enough about their applications to enable you to choose wisely. This book will take you through the components of a typical system and the practical things you need to know about - like panel angles and temperatures - to ensure optimum usage. You will also learn how to do a general survey of your home in order to evaluate its suitability. Although the installer you choose will do a survey for you, it’s good to know what they’ll be looking for and the different factors to take into consideration.
Those with a flair for DIY may be toying with the possibility of doing the installation themselves. Although this would save money in the short term, it will eliminate them from making money from the Feed In Tariff Scheme.
Similarly, there are many good companies selling a variety of solar systems but if you don’t know what to look for you could find yourself disqualified from taking advantage of FITs. You will find information here on choosing products, finding installers and the questions you need to ask them.
Each will have a different efficiency rate and price and you will soon discover that some are more effective in certain situations than others. You will be given plenty of tips for choosing the best option for your home and checklists have been provided to help you stay focused on the information that’s relevant to you?
As you begin to investigate the possibilities of turning your property into an energy efficient, income generator, you will come across many offers of FREE solar panels. On the face of it they look like a good idea, especially for those who feel they’ll never be able to afford solar panels any other way.
The ‘free’ route is fine for those looking to save some money on their energy bills while playing their part to reduce their carbon footprint, but not for those who want to maximise income from their installation. We will go through the pros and cons of free solar panels so you can judge for yourself.
Although, the initial investment in solar panels seems high, there are ways of raising the money to cover the cost. Traditional financial institutions like banks or mortgage lenders are now providing finance specifically designed for the purpose.
Some solar panel installers offer deals where they finance the installation themselves or via a third party in a similar way that you’d expect from a car dealership. When choosing this option, the cost of interest and term of repayment has to be set off against the predicted income generated, so the homeowner can expect to get a lot less from the deal at the outset but benefits should increase over time.
Just as you would expect from purchasing any high value item, there are hidden costs and different ways of dealing with them. Once the solar system is installed you want to be confident that everything possible is in place to keep expense to a minimum. By understanding what routine maintenance is required and what to expect from your warranty, the panels can be kept working at peak performance, providing you with an ongoing source of energy for your home, plus income for your future.
Those With Solar Panels And Those Without
Although the Feed In Tariff is a government backed scheme, the payments do not come directly from the government but from the energy companies themselves. Given that those benefitting from the full FIT payments are being paid above the market rate for the electricity their systems are generating, the money has to come from somewhere.
The energy companies find the extra money by passing the cost onto consumers. Those customers who are not taking part in the FIT scheme will be charged higher energy prices. In essence, those who do not have solar energy or qualify for the FIT scheme will be subsidising those who do.
Your Questions Answered
Throughout this book you will come across the most asked questions relating to different topics, but the first question that needs to be answered is:
Q: Is Solar energy for me?
A: There are three main areas you need to consider at the outset to decide if solar electricity is for you and your household:
1. Positioning: The best position for solar panels is within 90 degrees of south. It doesn’t matter which way your house is facing as they can be attached front or back. However, east and west facing roofs are still viable, so don’t rule anything out before checking what options are available to you. You do need to check to what extent the roof area will be overshadowed by neighbouring buildings and trees. Having the panels in shade for part of the day will affect the amount of energy that will be generated by your system.
2. Roof Size And Strength: Available roof space plays a major role in determining whether solar energy is an economically viable solution. Typically, an area of around 10m2 or more is required. The simpler the structure of the roof, the better the capacity to fit more panels than those that have lots of small, angled areas.
However, there are systems to meet different challenges so nothing should be discounted before checking with an accredited installer. Solar panels are quite heavy. It’s not always easy to judge for yourself if your roof is going to be sufficiently strong to bear the weight of solar panels without causing problems but you can always get the advice of an installer or builder, if in any doubt.
3. Planning Permission: The vast majority of home solar electricity systems in England, Wales, Scotland and Northern Ireland fall well within the limitations of size stipulated by the UK government and require no planning permission. However, it’s worth checking with your local planning office first and definitely if it’s a listed building or situated within a conservation area or world heritage site.
Q: I live in a flat. Does this mean that I can’t take advantage of solar energy?
A: If you live in a flat where there is a shared tenancy, it’s worth speaking to the other owners of the building to see how they feel about investing jointly in solar. Initial costs can be shared among the flat owners.The system will add value to the property and provide a good selling point for the future.
Q: What other benefits are there in installing solar panels, other than to make money from them?
A: If you live or are thinking of living in a remote area where there might be no other source of electricity available, installing solar panels could work out more cost effective than having electricity installed in the traditional way. For the sake of self-sufficiency and as part of a very cost-effective contingency plan, solar energy offers a virtually free source of power that’s good for the environment, too.