Should I Invest in Solar Panels for my Home?
Solar panels work by harnessing the power of the sun and converting this energy into electricity for your home which has the potential to create savings on your electricity bill. But, is now a good time to get solar panels fitted?
You may have heard of people getting free solar panels fitted and noticed more and more houses have them fitted these days. These deals sadly ended when the Government ended Feed-in-Tariff (FIT) legislation in April 2019. Previously, companies would offer to install and maintain your solar panels at no cost and then they would claim the money from the FIT. Over the last 10 years the Government has greatly reduced these subsidies until April of this year when no new installations would be eligible.
So if I get solar panels fitted now will it be cost effective?
Energy Saving Trust advises that the average domestic solar systems cost about £6,200 for a 4kWp system. From October 2019 VAT on solar and battery storage will increase from 5% to 20% so these prices are likely to increase.
So, the initial outlay is going to be at least £6,200. How much you save on your electricity bill each year will dictate how soon you can make your money back. The savings you will make depend on when during the day you use electricity and in which part of the country you live.
A downside of solar panels is that, unless you have a battery, that energy needs to be used straight away. So, if you are at home during the day then there are savings to be made. If you are out for the daylight hours then your solar panels are just powering your passive devices like fridges and freezers. The average cost and installation of a battery is £4,000 so whilst you can install a battery to use that power at night the savings are going to take longer to get to.
The savings you can make will vary therefore, Money Saving Expert estimates the savings can be between £90 - £250 a year. Even without getting the calculator out you can see with these numbers the time you are going to wait to you get your money back is going to be decades. In the worst-case scenario that it is going to be almost 70 years!
How long do they last? Do they need much upkeep?
As long as you keep the solar panels clean and free from physical damage they should last as long as your manufacturer's warranty, if not longer. Most solar panels come with warranties that last for 20-25 years and have a degradation rate between 0.3% and 0.8%. That means each year you can expect your solar panels to operate at slightly less capacity than the year before, ranging somewhere between 80%-94% capacity at the end of their expected lifetime.
The solar inverter is the most likely piece of equipment to fail, this converts the direct current produced by your solar panels into ready-to-use alternating current to power your house, and this could set you back anything between £500 to £2000.
Aren’t these things an eye-sore? Will it affect the value of my home?
The jury is out on this one, Which surveyed estate agents and 8% of them said solar panels increased the value of a house against 17% who said it would decrease the value of a home. That’s a lot of undecideds there and if you are selling a house with solar panels the money a new homeowner will save on utilities should be a strong selling point.
With the grants all gone is it worth getting solar panels?
If you are looking at this as a purely financial decision then at the moment the answer is no.
At this time, the point at which you make back your initial investment is potentially decades away but if you are not just looking at installing solar panels as a way to ultimately save money but also as a way to have a positive effect on the environment, then go for it.
It is a real shame that solar panels are not currently financially viable, many of us want to be more environmentally friendly and those of us who did not get in early on the free solar panel fittings craze are pretty much out of luck - unless we want to foot the substantial bill ourselves.
However, there is some good news on the horizon. From 1st January 2020 any newly fitted solar panel installations will allow the homeowner to directly sell unused energy back to their supplier. Some companies already offer this but from next year the Government will legislate that major energy companies will have to buy the surplus energy back.
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