Are Solar Panels Still a Worthwhile Investment?

With the changes to the FiTS, many people are beginning to wonder if solar panels are still a worthwhile investment for their homes. If the drop in the tariff rate to 21p kWh has you rethinking your decision to install a solar PV system for your use, these are some facts you should know.

The original FiTS rate was based on much higher costs for solar panels and solar PV installation than we are paying today. When the FiTS was developed, the government expected the price of solar panels to come down slowly over the course of several years. The tariff was designed to return approximately 8 percent on investment. The dramatic drop in the cost of solar panels boosted the ROI, brought far more people than expected into the market sooner than expected and endangered the FiTS. The adjusted FiTS brings the expected ROI back to the level at which it was designed to operate – about 8 percent for a 4 kWp solar PV system.

In short, investing in solar panels now, even with the reduced tariffs, will still result in a high ROI.

In addition to the FiTS income, the benefits of solar panels include lower electricity bills starting from the day your solar PV system is hooked up and operational. According to government figures, the typical 3 kWh home installation will see a savings of about £190 annually. That’s over and above the income from the FiTs.

The typical 3 kWh home installation will pay out approximately £500 annually. That income is tax-free, linked to inflation and guaranteed for 25 years.

Using those figures, the total gain for installing a 3 kWh home solar PV system – the most common size installed for a single family residence – is approximately £690 per year. Over 25 years, that amounts to £17,250.

The typical cost of a 3 kWh solar PV system, including VAT and installation, is about £7,500. That means that over the course of 25 years, your solar panels will earn a profit of nearly £10,000, tax-free.

The actual return on your investment will vary according to the actual amount of electricity your panels generate and the amount of electricity you use. The FiTS is designed to pay you for every kWh of electricity that your solar panels generate, with an additional payment for every kWh your solar PV system generates and exports to the grid. Thus, if your panels generate more electricity and you use less, your profit will be greater.

The best way to get an individualized assessment of the ROI for solar panels on your roof is to set up a consultation with a local installer of solar panels, who can survey your property and tell you approximately how much electricity you can expect if you install a solar PV system on your roof.

Facts About the Changes to the FiTS for Solar Panels

Are you confused about the effect of the government’s changes to the FiTS scheme for solar panels and solar PV installations? You’re not alone. The recent court decision and the government’s decision to seek leave to appeal that decision to the Supreme Court have left a great deal of uncertainty about what will happen to those who have (or have had) solar panels installed between 12 December 2011 and 1 March 2012. These are the facts about the changes and how they will affect solar PV installations now and in the future.

If You Were Registered for the Scheme by 11 December 2011

…and your solar PV system is rated for up to 4kWh, you will receive the 43.3p tariff rate for 25 years. The proposed changes do not affect you.

If You Will Be Registered Between 12 December 2011 and 2 March 2012

…and your solar PV system is rated for up to 4kWh, you will receive the 43.3p tariff rate for electricity generated until at least 1 April 2012. Depending on the decision made by the court, your rate may drop to the proposed 21p rate for electricity generated after 1 April 2012 or you may receive the 43.3p rate for the full 25 years.

If You Will Be Registered After 2 March 2012

…and your solar PV system is rated for up to 4kWh, you will be paid the 21p rate for all electricity generated by your solar panels for 25 years. Your home may also need to meet higher efficiency standards in order to qualify for the tariff program.

The government also released a fact sheet about the FiTS changes that include information on the expected return rate for installed solar panels at the lower 21p rate. According to those figures, even at the lower rate, a typical home installation could generate up to £500 annually for 25 years in addition to approximately £190 in electricity savings. The Energy Saving Trust provides a solar energy calculator that can help you pinpoint your projected savings and payments more closely based on your post code.

To summarize for those who are weighing whether to install solar panels at this time:

If your solar panels are installed and become eligible for FiTS before 3 March 2012, there is a possibility that your solar PV system will be eligible for 25 years of payments at the 43.3p rates. That is not a certainty, however. If the government appeals and wins its appeal, your solar PV system will be eligible for the 43.3p rate for electricity generated between 12 December 2011 and at least 1 April 2012. No matter what the outcome, you are guaranteed to receive at least the 21p rate for 25 years as long as your solar panels are accepted as eligible for FiTS.

500 Council Homes in Cambridge to Get Solar Panels. Shouldn’t Yours?

The South Cambridgeshire District Council had thought they’d get in on the solar panels gold rush by installing solar PV systems on 2,300 council homes, but when the Government slashed the FiTS without notice in November, they backed off the plans.  However, after a new study of the possibilities and economics has renewed the plan and it’s back on. The district council has announced that it wants to install solar panels on as many as 500 properties where the roof space and orientation will generate the most electricity.

The solar panels will be paid for and installed by the end of March by Savills Solar. Participating households will have free electricity during the day, and any surplus electricity generated by the solar panels will be sold to the electric companies to pay for the project.

Savills Solar will pay for and fit the panels by the end of March, with electricity being available to households for free during the day, and the surplus being sold to pay for the project. The 500 tenant households that will be part of the solar panels project are expected to save at least £150 on their fuel bills annually. The council’s cabinet member for housing expressed frustration that the benefit couldn’t be more widespread, but says that he is pleased that the council and the solar PV company were able to find a way forward.

The change in plans was made necessary by the recent announcement by the UK government that the subsidy rates provided by the Feed-in Tariff Scheme would be reduced by 50 percent from 43.3p to 21.1p.

Thousands of property owners jumped into the fray to take advantage of the high subsidies for solar panels – among the highest tariffs in the EU. The enthusiastic response, coupled with the unexpectedly rapid drop in the prices of solar panels and solar PV installation, swamped the financial means of the tariff program and, according to ministers, endangered its existence. Reducing the tariff rate, officials explain, brings the return on solar panels back into line with original expectations and increases the number of people who can benefit from it.

As the South Cambridgeshire Council discovered, the reduced tariff rate is still a profitable proposition for many homes. The homes chosen to be part of the solar panels installation program will see savings of over £150 annually, and take in more than that amount through a combination of tariffs and selling off the excess electricity.

The revenue from solar panels amounts to between 25 and 30 quid a month when you count in the tariffs and the savings. If you could find a better use for that kind of money than to shovel it at your electricity supplier, contact a solar panels installer in your area and request a consult to find out if your roof is a suitable location for a solar PV system.

New Solar Panels Tariff Rates Are Still a Good Deal

Around the country and all over the Internet, new adverts are proclaiming the government’s loss in the matter of the solar panels subsidy. Back in November, the government announced a hurried reduction in the 43.3p per kWh feed-in tariff to 21.1p per kWh and the solar panels industry went into a frenzy of sales and business as homeowners rushed to get their solar PV systems installed before the tariff rate changed.

The solar industry and others with a concern stepped up and challenged the Government’s ruling as illegal, and the courts agreed, calling the decision to reduce the solar PV tariff rate “legally flawed”. Since then, the Government has appealed the court’s ruling to the High Court – and lost, and announced that it will take the appeal to the Supreme Court. The end result is that no one is quite sure of the current rate for the feed-in tariff.

So where do the actual facts lie? And is it worth it anymore to install solar panels on your roof?

Here’s the breakdown for solar PV tariffs as it currently stands.

If you installed solar panels before 1 November, your FiTS payment will be 43.3p per kWh generated by your system, and that rate is guaranteed for the next 25 years. At that rate, your solar panels will likely pay themselves off within 5 to 7 years. Beyond that time, you’ll continue receiving hundreds of pounds annually in FiTS income, in addition to the savings you’ll realize by reducing the amount of electricity you buy from the electric company.

If you install solar panels between now and 1 March, you may receive the 43.3p rate for the next 25 years if the government fails its final appeal. You may receive the 43.3p rate until 1 April and the 21.1p rate going forward from that date, or you may receive the 21.1p rate from the time your solar panels are installed, depending on the agreement reached by the courts. At that rate, your solar panels will have paid back your investment between 10 and 12 years from installation, and you’ll receive a few hundred pounds of income a annually for the remainder of the 25 years in addition to the savings you’ll realized from generating a portion of your own electricity instead of paying for it all. And in either case, the money you receive in FiTS payments is tax-free.

In short, installing solar panels still makes good financial sense, even if you only get the lower subsidy. It will simply take longer to repay your investment and your profit will be less – but it will still be quite a decent return on your investment. The only real difference is that if you install and register your solar panels now, before the 3 March deadline, you’ll have a chance at getting the higher rate on the FiTS, at least temporarily. Even at the very worst case scenario, you’ll earn a decent return on your investment.

Solar Panels and Roof Types

Choosing to install solar panels on your roof can be a big decision. In most cases, you’ll be committing about £7,500 to the project, and placing a system of heavy panels on the roof of your house. Understanding the types of solar panels and solar PV systems that can be installed on roofs can help you make your decision. The National Energy Foundation lists five different solar PV roof system types identified by the EurActive Roofer Project that ran between 2005 and 2008. The five types of solar panel roof systems identified are:

Traditional Bolt-On Modules on Sloping Roofs

Most solar panels installed in the UK are of this type. The system consists of rigid solar panels that are permanently fixed to a sloping roof by rails and hooks or by dedicated fixings. Properly installed, solar panels of this type do not compromise the integrity of the roof. The panels are nearly always installed to sit several millimetres above the actual roof surface to allow for ventilation. The Department of Energy and Climate Change estimates that as many as 80 percent of the roofs in the UK are suitable for this type of solar PV installation, and nearly any UK installer can provide solar panels and fittings for this type of system.

Roof Integrated Modules

In some cases, particularly when a new roof is being fitted to a home, the solar panels replace the roof covering rather than being affixed to it. Installing solar panels this way can reduce costs slightly and reduces the visual impact of a solar PV system on the roof. It offers a lower profile, and requires no special consideration for wind loading since the panels are the roof rather than being fixed to it. In some cases, the solar panels cover the entire roof. In others, they are put in as roof lights.

Solar Tiles

Solar tiles are among the more expensive ways to incorporate solar panels on the roof. They often use amorphous silicon for flexibility, and are the least visually intrusive of the main types of solar PV systems.

Continuous Thin Film Solar

Thin film solar is an emerging technology that is used almost exclusively in commercial installation. The solar panels made this way are generally supplied with electrical connections already attached so they can easily be installed by regular roofers. Like solar tiles, continuous film solar is a more expensive technology.

Traditional Solar Panels on Flat Roofs

While the idea roof for solar PV installation is pitched at about 30 degrees, solar panels can be installed on a flat roof. Instead of mounting directly to the roof, the solar panels are installed into A-frames that are bolted to the roof. One of the major advantages of installing solar panels this way is that it’s possible to set the panels at the optimal angle for the specific location where they are being installed.

To find out which solar PV system is the best choice for your home, contact a local solar installer and request a consultation.

Answers to Basic Questions About Solar Panels

Are you looking for simple answers to basic questions about solar panels? These are some of the most frequently asked questions about solar PV systems, and simple answers that anyone can understand.

What are Solar Cells?

Solar cells are the smallest element in a solar PV system. They are made of silicon or another substance that conducts electricity. The silicon is treated to generate a flow of electricity when light shines on it. Solar arrays or solar panels are multiple solar cells arranged into a single panel.

Do Solar Cells Store Energy?

No, they just convert sunlight into electrical current. The electricity generated must be used immediately or stored in batteries to use later.

Does That Mean I Won’t Have Electricity at Night or on Cloudy Days?

Your solar panels won’t generate electricity at night, but you’ll still have power. Most solar PV systems installed in the UK are grid-tied systems – that is, they are connected to the national grid. In a grid-tied system, your home will draw electricity from your solar panels when it is available. When your solar panels are not generating electricity or not generating enough electricity, your home will draw power from the conventional electric grid.

What if My Solar Panels Make More Electricity Than I Use?

In a grid-tied solar PV system, any electricity that you don’t use will be exported to the national grid. If you are participating in the Feed-in Tariff scheme for which most small solar PV systems qualify, you will receive a payment for every kilowatt hour that your solar panels produce, whether you use it or export it to the grid. You’ll receive an additional amount on top of the base payment for electricity that you export to the grid.

How Much Electricity Will My Solar PV System Generate?

The amount of electricity generated by your solar panels depends on many factors, including your geographic location, the positioning of the panels, the weather and light conditions and the size and type of solar PV system you install. The Department of Energy and Climate Change estimates that solar panels installed on most homes in the UK have the capacity to generate up to 50 percent of your annual electricity use.

Weather Conditions? How Well Will My Solar Panels Work on a Cloudy Day?

Solar panels are most efficient with bright, sunny weather. If the sky is lightly overcast, your solar PV system might produce half the amount of electricity, while on a dark, overcast day you might only get about ten percent of electricity you’ll get on a clear, sunny day.

Solar panels provide electricity without any harmful carbon or other side effects to the environment. Solar PV systems are silent, easy to maintain and generate electricity as long as there is daylight. If you have other questions about solar panels, talk to a solar installer in your region to get more specific information about solar power in your area.

Choosing The Right Companies to Give a Quote on Solar Panels

The government’s subsidy for solar panels and solar PV systems has brought the cowboys out of the woodwork again. The same operators who went into overdrive to sell thermal windows 15 years ago have come out in force to profit from the sudden market for solar panels. They’re cluttering your Inbox with offers of free consultations to determine if your home is a good fit for solar panels and knocking up and down your street asking to speak with the man of the house. How do you decide which companies you ask to give you a quote on a solar PV system? These suggestions and tips can help you make a decision about which companies you can trust to give you a real quote on solar panels and installation.

Ignore the door-knockers.  Legitimate installers of solar PV systems don’t need to drum up business by knocking on doors up and down the street. They have plenty of customers ringing them up and making appointments without resorting to these shady business tactics. If you let one of these shady characters into your home, you could be opening yourself to anything from high-pressure sales tactics to a home burglary.

Choose companies that are accredited through the Microgeneration Certification Scheme. MCS is an internationally recognized quality assurance scheme that regulates installers and products that generate electricity. When you choose a company that is MCS certified, you can be sure that both the company and the solar panels they install have committed to reaching the high standards required for accreditation. In addition, you’ll only be eligible to participate in the feed-in tariff scheme – which pays you for the electricity your solar PV system generates – if your system was installed by an MCS-certified installer.

Find a solar panels Installer through the MCS Website.  MCS has an installer search page on its website where you can search for solar PV installers in your area. There are thousands listed, so you’ll still have to narrow your search down through other means, but it’s a good starting point.

Check the company website.  The company website is a starting point to learning about the solar installer. It should provide you with the basic information you need to book an appointment as well as background information on what to expect from a solar installation consultation and appointment. Some will also post testimonials from satisfied customers, which may be nice to read but should be taken with a grain of salt, especially if they’re posted by the company rather than via a feedback tool that allows customers to post their own reviews.

Ask for references.  Ring up the company, prepared with a list of questions to which you want answers. A legitimate company will take all the time you need to answer your questions and make sure you understand the responses. If you’re happy with the conversation, ask for references from former customers – most companies have at least a few people who will discuss their experience with the company with prospective customers.

At the end of all that, you’ll have come down to two or three installers who sound legitimate, friendly and knowledgeable. Make appointments with them for a consultation to determine which can offer you the best quote on installing solar panels on your property.

Basic Answers to Questions About Solar Panels

Despite all the hubbub about solar panels, many people still have basic questions about solar energy and how it works. While you don’t need to know a thing about current flow or positive and negative poles to turn on a switch and get light, sometimes it’s nice to understand a little bit about the workings. Here’s a little basic information about solar PV systems and how they work.

What are Solar PV Panels?

The PV in solar PV panels stands for “photovoltaic”, a word that is made up of two parts: “photo”, from the Greek word for light and “Volta”, derived from the electrical energy innovator, Alessandro Volta, who gave his name to the “volt” – a basic unit of electrical measurement. Thus, solar PV panels are panels that make electricity from the light of the sun.

What are Solar Cells?

Solar cells are the basic unit in solar panels. Each solar cell is made up of a material – usually silicon – that reacts to light by producing energy. Each solar panel is made up of a number of photovoltaic solar cells arranged in a grid on an aluminum frame and covered with glass or another transparent material to protect the surface.

When light hits the solar PV cells, they create a field of electricity, which is converted by an inverter from direct current (DC) to alternating current (AC) which can be used by appliances and other electrical gadgets in your home, or sent back to the grid to become part of the pool of electricity used by everyone.

Why Do We Put Solar Panels on a Roof?

The amount of electricity produced by solar panels is directly related to the amount of daylight that hits the solar cells. A south-facing roof provides the most amount of daylight, thus placing solar panels on a south-facing roof at the proper angle collects the most direct sunlight, thus is generally the best place to locate solar panels. In some cases, a solar PV installer may determine that a south facing wall – or one that faces within 90 degrees of south – is a better alternative because a roof isn’t suited for one reason or another; and occasionally, when a property has enough land with no shade or obstructions, solar panels may be installed at ground level on frames.

How Much Do Solar PV Panels Cost?

The cost of installing a solar PV system typically runs between £8,000 and £15,000, depending upon the size of the system and the makeup of the solar panels. The energy savings trust estimates that the typical household can save about £200 per year on your electricity bill, and cover up to 50% of your electricity needs with a 2kWp system. In addition, the government provides subsidies that pay you for every watt of electricity that your solar panels produce. Taken together the subsidies (from the feed-in tariff scheme, or FiTS) and the electricity savings can repay the costs of your solar panels within 10 years.