Last year, solar panels represented somewhat of a no-brainer from an investment point-of-view, just as long as you could afford the relatively high cost of entry. The 2012 feed in tariff cuts have made this decision tougher now, so read on to see if solar panels are still a good buy for your home.
Ultimately, you have to think carefully about your reasons for installing solar panels on your home. Are you getting them purely as an investment and to save money? Or do you reasons stem more from the energy saving and environment saving nature of the technology?
There is no denying that the recent feed in tariff cuts have thrown a spanner in the works if you intended to make a bit of money. You can certainly do this, but you will earn a lot less, thus it will take much longer to pay off your investment. It’s not all doom and gloom though, because over recent months the cost of solar panels has come down somewhat, and a typical installation can cost you around £8000.
Current interest rates in the UK are very low – around 4-5% before tax. Solar panels however can bring a return on investment of up to 10% across a 25 year period, so can still represent a good investment. You will also be somewhat protected from increasing energy prices from your supplier.
So, even the investment is still reasonable. But the other factor at play is that you will be doing a lot to help the environment. The burning of fossil fuels currently releases millions of tonnes of carbon dioxide into the atmosphere every year. By installing solar panels you can help reduce this by over 1 tonne every year.
Finally, there is the current efficiency of solar panels. Presently, at around 20%, solar panels are relatively inefficient at generating electricity in relation to the amount of sunlight they are exposed to. Laboratories have achieved over 40% efficiency and are currently aiming at breaking the 60% mark. This could mean that much more efficient panels will become available over the next decade with the potential of saving even more money over the long-term. Unfortunately we can’t predict the future so investing now or waiting to invest later is unfortunately a bit of a gamble!