Solar Panels for the Home – A Bright Idea?

I had a salesman call at my house on Monday trying to sell me solar PV panels.  I gave him short shrift as I do with most poor sales people that turn up at my door, but it got me thinking.  Over the past few months I have seen a few local homes with panels slapped onto their roofs, so I decided to do a little delving online.

As you no doubt know, solar panels have been used for years to generate energy through the power of the sun’s rays.  They are most commonly seen on commercial buildings, but thanks to the manufacture of a smaller type of panel, they are now available for the home.  Now, the cost of installing these beauties is actually quite astronomical and you could be facing a bill of £12,500 which is a considerable amount of money for anybody.  The salesperson I spoke to on Monday told me I could save thousands on my heating bills.  What he didn’t tell me is that the average household would save £140 a year on electricity bills so those thousands would take years to materialise!

Ofgem has predicted that standard electricity bills are set to rise by 20% in 2020, but does that add to the appeal of solar panels?  Of course, we are all looking to reduce our bills, but the initial outlay is not going to be covered for several decades and the small yearly saving alone is not enough to deem panels as a worthy investment.

However, the Government, in a bid to improve sustainable resources and push the use of solar panelling, launched a scheme in April 2010 called the Clean Energy Cash Back Scheme.  This scheme is designed to give monetary rewards to owners of solar panels for the electricity they produce even when it is used in the home.  For every unit of electricity generated the scheme offers 41.3p and there is also a bonus of 3p per unit for any unused electricity that is sent back to the National Grid.  That means solar panel owners stand to make approximately £850 a year with this scheme.  And it gets better.  The UK Government have suggested that this scheme will last for at least 25 years and that payments will increase in line with inflation.  Payments are also tax free.  Following the initial outlay for your panels, this means a profit of £12,500 can be made over 25 years.

Of course, there are drawbacks.  Whilst the Government may have promised to run the scheme for 25 years, there is the risk that the scheme could be pulled if money-saving measures are required.  It always seems to be the good stuff that gets targeted.  Solar panel systems may also reduce in price as their popularity grows so your investment now might degrade in the future.  However, on balance, the savings you’ll make on your bills and the payments from the Government scheme do make solar panels an investment worth considering.  There are also the environmental benefits to consider too of course.

A couple of weeks ago we published an article about new energy saving homes and how they are more favourable with home buyers.  So, not only do solar panels give you value through savings and scheme payments, but they could push up the value and selling potential of your home too.