Are Solar Panels Worth It? Why You Should Install Solar Panels
Installing solar panels will not only save you money on your energy bills; you’ll also earn money from the Government Feed-in Tariff for the electricity they produce.
You can expect to earn up to £7,300 from your solar panels over 25 years, making them a long-term (but profitable) investment.
The benefits of solar panels aren’t just financial - they’re also extremely low maintenance and help you to reduce your impact on the environment.
Are Solar Panels Worth the Investment?
The short answer: yes.
*Based on a survey we conducted in January 2018 of 390 UK homeowners with solar panels.
Under the Feed-in Tariff (FiT), the Government rewards you with cash for generating your own electricity from renewable technology. The cash you receive under the FiT is guaranteed for 20 years and is tax-free.
The FiT pays you for:
• Every kWh of electricity produced by your solar panels (Generation Tariff)
• Every kWh of electricity produced by your solar panels that you give back to the National Grid (Export Tariff)
The current FiT rates for April to June 2018 are:
Generation Tariff Rate
Export Tariff Rate
4.01p per kWh of electricity
5.03p per kWh of electricity
Installing solar panels will also enable you to save money on your energy bills. This is because you’ll be powering your home with free electricity and so won’t need to buy as much from your energy provider. In January 2018, we ran a survey asking 390 UK homeowners about their experiences with solar panels, and 84% said they save up to 50% on their monthly energy bills. What’s more, solar panels can also protect you from any future rises in energy rates - so it’s a win-win situation.
Solar Panel Cost Savings
Solar panels last for about 25 years before they need replacing. Feed-in Tariff payments will only last for 20 years, but you can still enjoy savings on your energy bills for their entire lifespan. You can expect to earn between £1,850 and £7,300 over 25 years from your solar panels, depending on how many you have installed and how efficient they are.
The table below gives you an idea of the predicted Return on Investment (ROI) from solar panels over 25 years. The more solar panels you install, the higher your potential ROI. For example, you can make a £1,300 profit from 16 solar panels over 25 years, compared to a £350 profit from 2 solar panels over the same period of time.
Will Reductions to the Feed-in Tariff Impact Your Return on Investment?
Because the cost of solar panels has fallen by as much as 70% since 2010, it now makes financial sense to buy solar panels without the need for an additional monetary incentive. This has led to a review of the Feed-in Tariff, of which the Government has decided to end it in April 2019 - making now the best time to invest in solar panels before the initiative is scrapped.
The amount you can earn from the FiT is reduced every 3 months, so it’s wise to install solar panels as soon as possible to lock in the current Tariff rates before they’re cut again in the future.
Bear in mind that there’s also a cap on annual spending for the Feed-in Tariff, which limits the number of households that can register for the FiT every 3 months. This makes it even more important to install your solar panels at the earliest opportunity; if you miss the cap, you’ll be placed in a queue for the next 3 months (which will have lower FiT rates).
Good to know: your solar panels must be installed by an MCS accredited installer in order to qualify for the Feed-in Tariff. If they’re installed by an uncertified person, you won’t be able to earn money from the electricity your solar panels generate.
Interested in getting solar panels? Answer the question below to fill in a short form so that we can put you in touch with one of our trusted MCS accredited partners. They’ll give you a bespoke solar panel quote for your home.
How to Maximise Your Return on Investment: 5 Top Tips
So you know that solar panels are worth the upfront cost, but how can you boost the amount you can earn from them? Here are our 5 top tips to maximise the money you make.
1. Install your solar panels as soon as possible. Because the amount you can earn from the Feed-in Tariff is reduced every 3 months, installing solar panels at the earliest opportunity will increase the amount you can make from the electricity they produce.
2. Ensure your solar panels are installed at an optimum position on your property. This means in a position on your roof where they’re facing south, west or east at an angle between 10 and 60 degrees, and one in which they’re not covered by shade. This will maximise the efficiency of your solar panels, and so the more electricity they’ll produce. You’ll therefore increase how much you can earn from the FiT (as well as how much you save on your energy bills).
3. Install the highest number of solar panels as possible. Obviously this is dependent on how much roof space your property has, but the more solar panels you install, the more profit you can make over 25 years from the FiT and savings on your energy bills. If your property only has a small amount of available roof space, then make sure to install solar panels with a high efficiency (over 19%); a smaller number of solar panels with a high efficiency will produce the same amount of electricity as a larger number of solar panels with a low efficiency.
4. Reinvest the money you make from your solar panels. A good way to maximise the amount you make from solar panels is to reinvest any cash you save on energy bills, plus any money you make from the FiT. Consider putting it into an ISA, savings account or bond. Doing so will enable you to receive interest on these earnings, and increase how much money you make.
5. Install a solar battery alongside your solar panels. A solar battery enables you to store any excess electricity produced by your solar panels instead of giving it back to the National Grid. Doing so will allow you to power your home with free electricity at times when your solar panels don’t produce energy (like at night). This will reduce your reliance on buying electricity from your energy provider and increase the amount you save on your energy bills even more.
Why Else Is it Worth Buying Solar Panels?
Aside from the money you can earn through the Feed-in Tariff and savings on your energy bills, solar panels have plenty of other benefits that make them a worthwhile investment.
• Solar panels are long-lasting and reliable. Solar panels typically last for about 25 years before they need replacing (but they can work for over 30 years). During this time, you’ll find that your solar panels will require little (if any) maintenance work. This is because solar panels are extremely reliable and not prone to breaking. If by chance yours do, you’ll probably find that your product warranty covers repairs, so finding money to fund their upkeep isn’t something you’ll need to worry about.
• Solar panels have fallen in price. The cost of solar panels has plummeted by as much as 70% in the last decade, due to the solar technology market maturing and the falling cost of solar mass production. Back in 2010, 16 solar panels would have set you back over £10,000; the same number of solar panels now cost as little as £6,000. So while the amount you can earn from the Feed-in Tariff has dropped, you can still earn a healthy profit from your solar panels as upfront costs have also dropped.
• Solar panels can increase your property’s value. This is because potential buyers are likely to view the Feed-in Tariff payments favourably. Cash earned from the FiT go to the homeowner; so if you move house within 20 years of installing your solar panels, the new residents will take over the remainder of the FiT payments. Solar panels are therefore viewed as a cash-generating asset when selling a property, which should boost its asking price. In fact, from a survey we conducted on 390 homeowners back in January, 83% said that they’d pay more for a home with solar panels.
• Solar panels provide a long-term subsidy to regular savings and pensions. Because you can earn a steady profit from solar panels over 25 years, they can provide a sizeable income and supplement your savings account and pension (especially as the cash you earn is tax-free). If you’re nearing retirement age, solar panels are particularly beneficial as they save you money on your energy bills; something that a large proportion of your pension is often spent on.
• Solar panels are good for the environment. Solar panels only rely on the sun to generate electricity, a renewable source of energy. Unlike using coal, oil or gas to produce electricity, solar panels don’t release any toxic greenhouse gases into the atmosphere, meaning that the electricity from your solar panels is completely ‘clean’. Just 8 solar panels can save up to 2.1 tonnes of carbon dioxide from entering the atmosphere every year, while 16 solar panels can save up to 4.2 tonnes of carbon dioxide (equivalent to that produced by burning over 2 tonnes of coal).
What Are the Next Steps?
If you’re considering solar panels then don't wait too long before installing them. The Feed-in Tariff reduces every 3 months, so you’ll be better off financially by installing solar panels sooner rather than later.
To get a bespoke solar panel quote for your home, just click the orange button below to fill in a short form. We’ll ask you some simple questions about yourself and your property, so that one of our trusted partners can contact you with a personlised quote that suits your needs.
How Much Would Solar Panels Cost for Your Home?