Solar Panels Generate Energy and Income

If the thought of having solar panels installed on your roof seems a bit intimidating and a whole lot expensive, you might be surprised at how much economic sense a solar PV system actually makes. Much of the information people believe they know about solar panels is based on outdated figures. While a solar PV system certainly isn’t cheap, it’s probably not as expensive as you think, even before you start offsetting the installation and purchase cost of solar panels and an inverter.

In fact, the price for solar panels has come down by about 40 percent since 2009. Currently, you can install a solar PV system on your rooftop for about the cost of a new automobile. Unlike the automobile, though, your solar panels can be expected to last at least 20 years. And unlike the automobile, which will cost you a constant stream of cash for upkeep and fuel, your solar panels will start saving you money the moment the electrician flips the switch to start you using solar power. You’ll save money on your power bill every month and get payments from your electrical supplier for power you export to the grid. In addition, if you qualify for the Feed-in Tariff Scheme – which most small solar PV systems do – you’ll receive a guaranteed, tax-free annual income from your solar panels for 25 years.

The Cost of Solar Panels

The cost of a solar PV system varies widely depending upon the size of the system, the type of solar panels used and incentives that may be provided. Nationally, the average cost of the typical residential solar system is less than £10,000 – often considerably less.

Solar PV Savings

Like cost, the savings you’ll realize from your solar panels will vary widely. The more electricity your solar panels generate, the more money you’ll save. Thus, a larger system will return bigger savings than a smaller system, and a solar PV system in some parts of the country will generate more electricity than in others. In addition, how much you save will depend on how much you pay your utility company for your electricity currently and on your electricity usage patterns. DECC says that many UK homes can expect to generate 50 percent of the electricity they use from solar panels over the course of a year.

Feed-In Tariff Bonus

In addition to the savings, eligible solar PV systems will qualify for a tariff payment for every kWh of energy produced by their solar panels, even the electricity used in their own homes. As of 3 March, 2012, the rate is 21p per kWh, with an additional 3p tacked on to each kWh your solar panels export to the grid instead of using. Depending on the size and efficiency of your solar PV system, the payments could total several hundred quid a year, and are guaranteed for 25 years.

Payback

You can do the math yourself on the estimated time it will take for your solar PV system to pay itself off, but DECC estimates that for most people, it will take between 10 and 12 years. After that, your annual savings and tariff payments are pure profits, generated by your solar panels. And you thought they were only generating electricity!