All around the world people are being hit with rapidly increasing costs of living. For some, this making it ever harder to make ends meet and any way to cut down on the monthly and yearly outgoings is welcomed with open arms. One area that many people are looking at is the investment in renewable energy sources such as solar panels and solar heating.
The draw of solar electricity is quite alluring, thanks to the ability to save a considerable amount of money, but at the same time, save over one tonne of carbon dioxide emissions every year. So how much do they actually cost? There are a number of factors that you need to take into consideration when purchasing solar panels for your home in order to know whether or not they will prove to be a solid investment.
Types of solar energy
There are a number of types of panel, the most common being solar PV and solar heating. The difference is that solar heating is used for directly heating the water supply of the property using the heat from the sun and solar PV uses the sun's energy to produce electricity for the residence (or business). We will be concentrating on this second type of solar power in this assessment of costs and savings.
PV stands for photovoltaic, meaning that when the sun's rays fall on a solar photovoltaic module, a certain voltage is generated.
One of the foremost disadvantages of solar electricity comes from the pure nature of the power source - since the sun only shines during the day, this is the only time that electricity will be produced. Furthermore, electricity cannot be stored - it must be used when it is generated, meaning that if there is no demand for the electricity, then it will go to waste.
Fortunately, in the UK, the Feed in Tariff, a scheme introduced by the government, allows other homeowners connected to the national grid to use the excess electricity produced and in reward, the owners receive a tax free income every year.
How much do you need to invest?
Obviously, the cost of an installation is dependent on the size of your installation, which itself is dependent on a number of things:
• The surface area of roof suitable for solar panel use.
• Your energy usage needs.
• Your budget
You benefit from greater value for money on a larger system thanks to economies of scale, but a large system can become very expensive very quickly. The typical solar panel installation on a UK home is approximately 3kWp and will cost around £8000 - £10,000 (including VAT at the rate of 5%). Be sure to get quotes from a variety of installers though, because prices can vary quite widely. A 3kWp system will save you around £70 per year on your household bills and prevent around one tonne of carbon dioxide emissions every year.
How much can I earn through the Feed in Tariff?
By installing solar panels you are not only doing your part for the environment and saving on your electricity bills, but you can also earn an income every year for 25 years, thanks to the government's feed in tariff. The feed in tariff was introduced as a way of rewarding homeowners who sell unused electricity back onto the national grid, so that it can be used by other properties. Under the current rate, a typical solar panel installation would earn the owner around £600 per year in Feed in Tariff payments.
Should you take advantage of 'free solar panels' offers?
Clearly there are many advantages to installing solar panels on your home, but what if you cannot afford the large initial investment? Some companies offer a 'free solar panels' service, which at face value seems very enticing. The catch is that the company takes the feed in tariff payments and you get the benefit of cheaper electricity bills. So, if you cannot afford the initial investment, free solar panels are probably a great addition to your home. If you have enough cash to spend on the other hand, it is a much better investment to buy the solar panels yourself and earn a nice tax-free income over the following 25 years.
The draw of solar electricity is quite alluring, thanks to the ability to save a considerable amount of money, but at the same time, save over one tonne of carbon dioxide emissions every year. So how much do they actually cost? There are a number of factors that you need to take into consideration when purchasing solar panels for your home in order to know whether or not they will prove to be a solid investment.
Types of solar energy
There are a number of types of panel, the most common being solar PV and solar heating. The difference is that solar heating is used for directly heating the water supply of the property using the heat from the sun and solar PV uses the sun's energy to produce electricity for the residence (or business). We will be concentrating on this second type of solar power in this assessment of costs and savings.
PV stands for photovoltaic, meaning that when the sun's rays fall on a solar photovoltaic module, a certain voltage is generated.
One of the foremost disadvantages of solar electricity comes from the pure nature of the power source - since the sun only shines during the day, this is the only time that electricity will be produced. Furthermore, electricity cannot be stored - it must be used when it is generated, meaning that if there is no demand for the electricity, then it will go to waste.
Fortunately, in the UK, the Feed in Tariff, a scheme introduced by the government, allows other homeowners connected to the national grid to use the excess electricity produced and in reward, the owners receive a tax free income every year.
How much do you need to invest?
Obviously, the cost of an installation is dependent on the size of your installation, which itself is dependent on a number of things:
• The surface area of roof suitable for solar panel use.
• Your energy usage needs.
• Your budget
You benefit from greater value for money on a larger system thanks to economies of scale, but a large system can become very expensive very quickly. The typical solar panel installation on a UK home is approximately 3kWp and will cost around £8000 - £10,000 (including VAT at the rate of 5%). Be sure to get quotes from a variety of installers though, because prices can vary quite widely. A 3kWp system will save you around £70 per year on your household bills and prevent around one tonne of carbon dioxide emissions every year.
How much can I earn through the Feed in Tariff?
By installing solar panels you are not only doing your part for the environment and saving on your electricity bills, but you can also earn an income every year for 25 years, thanks to the government's feed in tariff. The feed in tariff was introduced as a way of rewarding homeowners who sell unused electricity back onto the national grid, so that it can be used by other properties. Under the current rate, a typical solar panel installation would earn the owner around £600 per year in Feed in Tariff payments.
Should you take advantage of 'free solar panels' offers?
Clearly there are many advantages to installing solar panels on your home, but what if you cannot afford the large initial investment? Some companies offer a 'free solar panels' service, which at face value seems very enticing. The catch is that the company takes the feed in tariff payments and you get the benefit of cheaper electricity bills. So, if you cannot afford the initial investment, free solar panels are probably a great addition to your home. If you have enough cash to spend on the other hand, it is a much better investment to buy the solar panels yourself and earn a nice tax-free income over the following 25 years.
Phillip Holloway is an author of http://www.turningsolar.co.uk, a resource for finding out solar panel information, how much solar panels cost, and how to go about having solar panels installed on your home. Phillip is passionate about renewable energy, energy efficiency and the environment.
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