Return on investment is linked to the price you pay for your solar panels
“Heat my Home’s philosophy is to educate, while promoting the use of solar panels for the long-term benefit of the home or business owner.”
The benefits of installing solar panels have been well documented within our pages. Small bills again, revenue generation and the attraction to home buyers if you wish to sell your home is the most obvious, but pride and a sense of ‘doing the right thing’ are not so well-known unless you take the plunge.
All positive attributes that I have been shouting from the rooftops (excuse the pun) for a decade of my life now. However, I have also been warning that the current higher rates of feed-in tariff incentives will only be available for the early adopters.
You still have time to be included in this privileged group, but the feed-in tariffs will be reduced once predefined installation rates have been reached and this will affect the ‘return on investment’ to later adopters.
Additionally, if you install today, you will also benefit from the huge reductions in the cost of the panels themselves, which have plummeted over the last couple of years. This is, however, only if you find an ethical installation company which again will affect your ‘return on investment’ outcome.
As with all industries, different companies have different business models and this can, and does, lead to a whole spectrum of price levels for the consumer to choose from. What can lead to even more confusion is the variety of solar panel technologies and the sub-categories of technologies within each type.
As an example, photovoltaic panels can be divided into two varieties. Monocrystalline and Polycrystalline panels which have huge differing outputs and costs. Some solar companies offer both and some don’t. Monocrystalline have better peak outputs, but usually cost more. This again may influence on your ‘return on investment’ long-term.
Basic specifications to confirm. Are they manufactured in the European Union or China? What inverter works best and does your installer offer a secondary optimize technology as a standard or not?
Asking the correct questions, doing your homework and receiving written confirmations before signing an installation deal could improve your ‘return on investment’ and leave your payback time being increased greatly.
The right company, the right technology and the right price is crucial for any home or business to get the real benefits of your solar panel installation.
A question of payback?
This is a question I heard more frequently over the last ten years. There is no other technology in life that I can think of that people become concerned about payback, but I have also noticed that the question is being asked a lot less frequently in today’s costly energy world than it used to be.
Nevertheless, I promised someone that I would tackle this thorny issue based upon my many years of experience and with the opinions of other trusted installers who also encounter this question on an almost daily basis too.
Your ‘return on Investment’ is linked to the overall price you pay for the installation.
A salesmen may tell you that you will get a ‘better return’ on a specific technology type (and be correct), but if you are paying three thousand pounds more, then will it still apply? – I doubt it.
My advice is to get three quotes. Most ‘ethical’ solar companies are not afraid of the higher-priced competition.
Technological differences can and do affect the output of a system which of course affects your overall payback time.
My advice would be to stick to a good branded panel and European manufactured Inverter which should be installed for less than £6K. Based on your SAP figures and assuming 50% electricity usage you should be returning around 15%. i.e. £800 – £900 per year at current feed-in tariff rates.
The SAP calculation should always be your starting point for calculating ‘return on investment’ and if you are happy with that return then, you will not go far wrong.
Some sales tactics include making claims of panels having 10, 20 or even 30% more output?
Don’t base any investment strategy on claims of certain panels outputting a better percentage of electricity output because MCS have already determined that SAP Calculations are the best and most honest measure to base calculations.
On average, though, panels last and generate for up to thirty years, the feed-in tariff and most manufacturers guarantee their panels at optimum performance for twenty years minimum and your electricity and heating costs (when running alongside a solar heating system) will stay low as your neighbours rise high.
The average homeowners at current feed-in tariff rates with a correctly priced system can expect a payback of between 7-12 years with a conservative additional benefit of 13-8 years of generating feed-in tariff income and an additional further decade of free power after that.
But be forewarned, as panel and technology prices are expected to rise again and the higher rate of feed-in tariff will not always be available to later adopters.
A clear window of opportunity that will give you thirty years of pride and household energy price stability in a world of instability – Priceless.