As more and more people decide to be environmentally conscious solar panels have seen a huge rise in popularity, with installations increasing by 45% over the last 3 year (source: Gov.uk).
A growing number of homeowners are realizing the value in solar power and are taking advantage of it.
Naturally, you’ll want know the facts – which is why we’ve listed all the costs associated with purchasing solar panels, including how you’ll save each year, and the date you’ll be breaking even.
How long will it take to make a profit with your solar panels?
The time to make money with your solar panels in 10.2 years, based on our most recent calculation.
The figure is based upon houses that get the most amount of sunlight in the UK and uses the standard electric rate and the most efficient smart export Guarantee (SEG) rates.
This relatively fast return on investment proves that the golden age in solar energy is upon us.
The price of solar power has dropped by 88% since the year 2010 according to government statistics and it’s just at the right time.
The cost of electricity for household use is rising quickly, which makes it wiser to utilize solar energy that is free and, with the SEG, you’ll be paid 7.5p /kWh to use solar power you don’t need.
Get in touch today if you are looking for solar PV installers Peterborough.
The Return on Investment explained
We’ve calculated how much of a solar array, incorporating the savings you’ll make on electricity costs from National Grid. National Grid, and added your savings from SEG.
What’s the result? Install solar panels now and you’ll make a profit in 10.2 years, on average.
It might take even less time to make a profit given that we anticipate the cost of electricity to remain high for for the next 2 years.
Because the standard solar panel warranty spans 25 years and breaking just after 10 years would give you 15 years of savings to make more money on your panels. And many solar arrays will last for more than 25 years.
In terms of percentages in terms of percentages, this percentage of returns is exactly the same regardless of how big your home. The graph clearly illustrates this that your costs remain steady and your savings increase, allowing you to make it to the point of breakeven in 2032.
But, a larger investment will result in greater profits.
The typical result is an income of around £4,759 from an array of solar panels for a two or one-bedroom house, and £7,932 when your home has three bedrooms and £11,105 if you have the array for four bedrooms.
How we came to it
- In our study we discovered that the typical solar panel is capable to produce 350 kW.
- The typical 3.5 power unit costs £5,420, as per the Energy Saving Trust, so it is clear that a 350 kW panel will cost £542 (inclusive costs for installation charges).
- We also found that the typical solar panel can generate 85.25 percent of its output throughout its lifetime so the average 3.5 kW system could deliver less than 3,000 kWh each year per year, on an average.
- The average household will not use all of the 3000 kWh, however, because most people aren’t at home for the entire the time. In the past, when the government used provide an export tax the tariff assumed that you would export 50 percent of the electricity generated and we based our calculations on this figure.
It means that you’ll consume about half the solar energy that you produce 1500 kWh. And the rest of the 1,500 kWh bring you cash through the Smart Export Guarantee program.
- This can help you save a significant amount of money in energy costs, but how much you will save is contingent depending on your house.
According to Ofgem the average home that has only one or two bedrooms utilizes 1800 kWh per year. the average home with three bedrooms consumes 2,900 kWh, while a home that has four bedrooms or more consumes 4,300 kWh.
- We have multiplied all of these figures by the median cost of electricity in the UK that amounts to 28.3p per unit, as per the Energy Saving Trust, to discover how much a household pays in electricity bills each year, as well as how much they’d save through solar power.
A three-bedroom home is, for example, expected to typically be paying £844 annually for 2,900 kWh. However, with the use of a 3.5 Kilowatt solar array that generates 1,492 kWh of power that the family uses and the homeowners could save £422 annually.
- We thought that people would opt for the highest Smart Export Guarantee rates currently in the market, which does not require you to change suppliers or purchase an additional item of expensive equipment.
Then, we multiplied that figure which is 7.5p for each kWh which we got from Octopus by the amount of energy that each household sends directly back into grid. A typical three-bedroom home is, for example, earning £111.89 annually from exporting 1,492kWh, which is half of its solar energy.
- We didn’t consider any maintenance expenses in our calculation. If you’re able of cleaning your solar panels every year, it’s completely free. The main cost – replacing the solar inverter is dropping every day.
The cost of inverters is expected to continue to drop in line with the continuing decline in home solar panel costs which have fallen by 50% since the year 2011 According to the government. The price of electricity is always going upwards. We expect these trends to be in opposition to each other.
The variables that influence the break-even point
Let’s get into greater detail about the factors that impact the return on investment you get with solar panels.
The length of time every year that the sun is shining is different throughout the United States, which you’ll be able to tell if you’ve had the majority of your time in different areas of these isles.
This directly affects the amount of energy you are able to generate. For instance, homes living in North Scotland receive 1,080 hours of sunlight each year, while the fortunate ones who live in East Anglia enjoy 1,570 hours in accordance with the Met Office.
This is 45% more sunlight that’s an increase of 45% in solar energy. This is a huge improvement.
Rate of Smart Export Guarantee
The Smart Export Guarantee compels large producers to pay their customers in exchange for renewable electricity they sell for National Grid. National Grid.
This means that you could receive an amount of money for solar energy that you don’t consume that’s 50 percent, on average.
But, different providers offer different rates, which range from E Energy’s cheap 1p per kWh, as high as the Octopus’s 7.5p for kWh.
Be sure to get the most expensive rate as it will cost you £112 each year in the average.
It’s also more profitable to make use of your solar energy rather than sell it to Smart Export Guarantee (SEG) payments and this is the place where solar batteries can help.
A solar battery could allow you use 30 percent more of your solar energy, as per E.ON.
It will save you an additional £186 annually. The average solar battery costs about $4500, delay the break-even point of the solar array for 20 years on average.
It also boosts your energy independence and lowers your carbon dioxide emissions by about 18 tons.
Your usage of electricity
The more electricity your home consumes when the sun shines the more solar power you’ll be using and the more you’ll save on electricity via National Grid. National Grid.
But, if you don’t own an solar battery and you only make use of electricity during the evening, you could save less dollars each year by using the solar panels.
If you’re using sophisticated controls that are smart, you’ll be able ensure that appliances such as dishwasher, washing machine and electric vehicle run on solar power which can help a great amount.
The cost of electricity
The cost of electricity purchased via National Grid National Grid at its current price is expensive, which is why you’ll be able to save even more by using solar energy for free as opposed to in the past.
Instead of having to pay £844 annually A three-bedroom home could be paying £310 for a savings of 63 percent.
As the price for National Grid electricity continues to increase, you’ll save more in the near future.
“Smart Export,” the Smart Guarantee
The Smart Export Guarantee (SEG) was launched 1 January 2020. The scheme requires all big energy companies across the UK (i.e. that have at minimum 150,000 consumers) to pay the households for the renewable energy they supply into National Grid. National Grid.
But, smaller energy providers are deciding to join in as well, which means there’s plenty of healthy competition.
There are a few energy companies that are currently offering at the very least 5.5p for each kWh of renewable energy that households export back to grid.