Are Solar Panels A Good Investment?

Are Solar Panels A Good Investment?

Solar panels have long been advertised as one of the more efficient and environmentally-friendly ways of cutting electricity costs, promising to not only save you money but also to provide an opportunity to do right by the environment and get cash back from the government. The UK government is the first in the world to introduce a cashback scheme to encourage Britons to align themselves with climate change goals. The scheme is called RHI, Renewable Heat Incentive, and is tailored towards households, communities and businesses.

First introduced in 2012, the scheme has undergone various upgrades and alterations. In April 2014 it was properly launched, and it is still on course to encourage the uptake of renewable heat technologies.

Take note

It’s important to clarify a few things before you rush out to benefit from the cashback RHI, and to ensure that your expenditure on solar panels is a good investment. You may have noticed that many companies offer free solar panel installations. Remember, that if a thing sounds too good to be true, it invariably is, so consider the following:

Many of these free installation schemes don’t actually give you ownership of the panels themselves. So, even though you will be knocking down your electricity bill, the installation company retains ownership of the panels and gets to keep all the cashback created by the Feed-in-Tariff (FIT) scheme.

On the other hand, if you tally up installation and solar panel costs, you arrive at a sum that ranges from £6,000 to over £10,000 – which is not exactly easy on the budget. So you may just wonder whether you really are better off paying the installation cost and owning the whole kit and caboodle. After all, you would think that in an ideal world you’re better off installing the solar panels and footing the bill yourself, right?

Well, it turns out that it’s not quite so simple, which is why you need to do your homework before you embark on such a project. There are so many variables and factors that play a role in just how much electricity the panels on your roof will generate and how much cashback you’ll get.

The tech

Old-school solar panels needed direct sunlight and heat energy to work, but today’s panels are more varied and far more efficient at collecting solar energy than before. Photovoltaic panels, for example, convert light energy into electricity, so the more light they get, the more electricity is generated, which means bigger savings on your monthly bill and a larger slice of the cashback incentive scheme. To maximise on the savings and the cashback incentive ideally your house should be south-facing. This is not to say that west or east facing roofs don’t stand to benefit, but remember that it will reduce the exposure to light, which will limit the amount of electricity generated. So, an important factor to consider and add into your savings calculations is the position of your home.

In addition to position, another factor is the gradient of your roof and the surrounding foliage, meaning that if you have large trees overshadowing your home, the amount of electricity generated will be impacted.

It is important to bear in mind that money-making and money-saving claims are always advertised at optimal levels and hardly ever, if at all, include additional costs, like installation costs and the cost of maintaining the panels. An important rule of thumb is to make sure that you only use companies approved by the Microgeneration Certification Scheme.

Once installed the panels won’t require excessive maintenance, though you have to ensure that they’re kept clean and free of debris. They should have a lifecycle upwards of 25 years, but the inverter, which is what links your roof to your domestic supply of electricity, will have to be replaced at some point during its lifecycle, and it is quite a costly replacement, anything from £800. So it's wise to find out about guarantees and warranties before you decide to go ahead and install solar panels.

As with all big ticket items, it’s important that you inform yourself of all the choices available, as well as the advantages and disadvantages of each option before you make your final decision. Once you have all the information you need to make a well-informed choice, the value you receive from the switch to alternative energy will not only be measured by actual savings, but also in knowing that you have put your best foot forward in reducing your personal carbon footprint.

photo credit: solar via photopin (license)

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