How large an investment is a solar photovoltaic installation, and how long does it take to pay itself back?
INITIAL INVESTMENT IN SOLAR PV
A solar photovoltaic system requires an investment of at least £9,000 (including VAT). This covers a fully installed system including panels, inverter, labour, mounting system, electrical connections, designs and all consultory help.
SIZE OF INVESTMENT
An initial investment of £9,000 will see a system of around 1.5 kWp installed. For an explanation of kWp and other technical terms please see
How a solar PV system works.
A rule of thumb for how much a system would cost is £2,000 + £4,000 per kWp. It can quickly be seen that a larger investment results in better value.
FEED-IN TARIFFS INVESTMENT GUARANTEE
The Department for Energy and Climate Change (DECC) announced in February 2010 how the long awaited feed in tariffs would be paid.
Click here to find out more.
The important points from that page are:
- The rate you are paid is guaranteed for 25 years, allowing long term planning of your investment.
- Your investment should return 7-9% tax free. For a basic rate tax payer this is the same as a high street APR of 9-11%!
- The feed-in tariff is index linked meaning your investment doesn't suffer if inflation runs out of control during the economic recovery.
HOW LONG DOES IT TAKE MY INVESTMENT TO REPAY ITSELF?
Short answer: It is expected to take around 10 years to return the investment on an 'average' system.
Long answer: The length of time for an investment to payback can only be accurately determined on a case by case basis. It is also determined by the cost of the energy that you are replacing - something that is not easy to estimate: between 1st January 2008 and 31st August 2008 the average consumer felt a price increase of 43%. (uswitch.com)
We are happy to discuss the payback times with you when establishing a quote.
"The ability to produce clean, green energy from homes can help to lessen our carbon emissions and bring down fuel bills. We, as individuals, must make a contribution to the fight against climate change, as we can't just expect big institutions or governments to solve the problem for us, we all have to make a difference."
Former Minister of State for Energy Malcolm Wicks MP.
Note: An updated case study will be available soon.
OTHER ENERGY SAVING MEASURES AS INVESTMENTS
The best financial investment in your home is achieved through insulation. They are not as glamorous, but they save you a lot of money for a small outlay. Roofs, walls and windows can all be made more effective at retaining heat within the home. The government recommends 26cm of loft insulation and there are grants available at varying levels depending upon your current insulation level.
Most houses built post-1920 could also benefit from cavity insulation, where a foamy substance is placed between the two layers in the brick work of the external walls. A list of insulation companies can be found
here. The payback for insulation can be as low as two years with governments grants taken into account.
If the house is fully insulated then the way to elevate yourself to the next level of green, not to mention reducing, or potentially removing, your exposure to ever increasing fuel prices is through microgeneration.
Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children.
Ancient Indian Proverb