Most companies will tell you that investing in solar may be expensive, but will actually save you money in the long-term, and may even help you make some of your money back. Solar photovoltaic (PV) cells will not only save you money on your electricity bill by generating energy from the sun, but any excess electricity can be sold back to the National Grid. This all sounds very promising, but with the initial investment being so hefty, it’s no wonder why people are still hesitant.
There are 6 main considerations to make when planning on investing in solar, to ensure you make the right decision.
This is heavily dependent on the type of PV unit you have, the governmentally-determined Feed-in-Tariff (FiT) rates at the time of the solar cell’s installations, and your own electricity usage. As there are so many factors at play, it is difficult to estimate an overall average for return on investment (ROI) and payback times, but usually it takes anything from 6 years to 15 years – it varies based on the amount that was initially invested.
2.Costs of Electricity
It is self-explanatory, but the higher the prices of electricity, the more you will save on your bills by using solar-generated energy to power your home. In times where electricity prices are on the rise, it may be a good idea to think about investing in sustainable energy sources to alleviate the financial impact of those dreaded bills.
Current trends show that solar cell installation costs are falling, and have been since the FiT scheme was introduced. This means that your ROI will be even larger, as the initial investment won’t be as great. For the best ROI, you might want to find panels that don’t cost too much to purchase and install.
Indubitably, this will affect the returns on your solar unit. The Bank of England’s target rate of inflation is 2%. Each year, the generation and export tariffs will be adjusted, and this may impact your solar panel ROI because the FiT is part of the Retail Prices Index (and thus subject to inflation).
Over the years, you will need to spend money on solar cell unit maintenance. There is a chance that the panels could deteriorate, so upkeep expenses must be accounted for. This is also essential to maintain your cell’s performance and efficiency as best as possible.
That sum of money being invested in solar panels could be put into a savings account with decent rate of interest, and could have been transformed into an even fatter sum of money. It is worth calculating how much interest you could be missing out on, and deducting this from the estimated ROI of investing in solar panels.
With all this in mind, you can make an informed decision on whether installing solar panels is the smartest investment for you to make. On the whole, it is profitable, but there are an array of factors to consider which may influence just how profitable it will be.