Solar panels cost
How much do Solar Panels cost?
Solar Panel Prices: What You Need To Know
Of course, one of the main things people want to know is the cost of their new solar panel system. The average installation will set you back between £3,000 and £8,000 depending on the size of your roof, the efficiency of your system and the core components used. You need to add into this that your solar panels system is actually an investment which can save you money on energy bills and make you extra cash from the government’s Feed in Tariff.
The Cost of Solar Panels Has Come Down
Like most new technologies, the more development and investment there is, the more the price starts to come down. A 4kWh system that would have cost you around £10-12,000 a few years ago will more likely set you back roughly £6,500 today. How much the price is set to decrease in the future will depend on a number of factors, of course, including:
- The supply and demand of solar electricity panels.
- Improved installation processes.
- Greater innovations and more cost effective manufacturing processes.
As with most building and construction work, having a shop round is the best advice for the getting the right price and, more importantly, the right solar panel system for your home or business.
Solar Panel Cost Case Studies
There are a lot of factors that go into calculating the cost and savings, including the size of the roof, the particular photovoltaic cells used and the number of panels needed to create a credible return on investment that provides an income from the Feed in Tariff (FiT) and reduces the fuel bill.
The following case study is for an average sized semi-detached house: (17 year ROI)
- House type: Semi-detached
- Solar panels: 2.00 kW
- Number of panels: 8
- Cost, including installation: £3800.00
- Estimated annual output: 1700 kWh
- Estimated annual FiT each year: £84.00
- Estimated Export Tariff: £40.00
- Estimated savings on fuel bills: £90.00
- Total Savings/Earnings in year: £214.00
For bigger houses, the price of installation is obviously greater but the cost savings are also better. Here is an estimate for a large size detached house in Teeside that used the most efficient solar cells: (15-16 year ROI)
- House type: Detached
- Solar panels: 4.00 kW
- Number of panels: 16
- Cost, including installation: £6750.00
- Estimated annual FiT: £168.00
- Estimated Export Tariff: £79.00
- Estimated annual output: 3,400 kWh
- Estimated saving on fuel bills: £167.00
- Total Savings/Earnings in year: £404.00
Obviously, a lot depends on usage when it comes to savings. A large family are likely to devour more energy than a house with just a single occupant, and the figures above reflect the recent cuts to the FIT after Jan 15th 2016.
Ways to Buy Your Solar Panels
If you have the capital available for buying your solar panels and installing them, then you could see some returns over the 20 years of the system’s life. A decent sized 4kW array with the Feed in Tariff will break even after 18-20 years not factoring in future energy price increases or any faulty components outside manufacturer warranty.
Most of us don’t have the finances to fully fund a solar panel installation and there are other ways of getting the money together, depending on your financial situation.
Taking out a Loan
The next option is to take out a loan which will mean you will have to do some serious calculations as to whether it is finantial viable to go with this option. Having said that, with the right solar panel system, it may be possible to break even within the lifetime of the system.
Find out more about renewable technology finance.
Get Your Solar Panels Installed for Free
Due to the huge decrease in the FIT very few companies are offering the chance to have your solar panels installed at no cost now. The catch? The installing company then takes over control of your FiT and owns the system for the duration of the contract. The benefit for those who cannot get the finances together is that get the system is installed and you can immediately gain from having cheaper bills. The down side is that you are locked into a long term contract and will not see any income from the FiT.
Benefiting from the Electricity Solar Panels Feed in Tariff (FiT)
One of the benefits of installing a solar panel array for your house or business is the green credentials and the significant savings on your electricity bills. Your system basically becomes part of the grid and you are paid (tax free for domestic homes) for the energy you produce. If you are a business and you take advantage of the FiT, then you will be subject to tax on the profit you make.
The amount you make from the FiT depends on your system size and its efficiency. As a rough guide, a 4 kW system will yield 4.39p per kWh. For a full listing of FiTs for all solar installations, you can visit Ofgem for more information.
You can also get more information about how Feed in Tariffs work from the Government’s website.
The average family home would require a 3 - 4kW system to benefit significantly from its output and resultant savings.
See the table below for an indication of average roof sizes and the corresponding initial outlay.
*Assuming that only the south-facing portion of the roof is used, with an average of 20% unusable roof space.
Purchasing options for solar panels
Buy them outright with cash
- If you have the capital available and you wish to invest you can attain a reasonable investment with the Feed-in Tariff. You can save a reasonable amount of money on your bills over 20 years and insulate yourself from future energy price increases. You will be looking at income and savings of roughly £266 per year from a 4Kw system.
Take out a loan to cover the cost
- If you don’t have the capital then the second option is to get a loan to pay for them. This method will allow for a considerabley longer term investment but will still offer some reward and offer the comfort of protection from rising energy costs. The loan and cost of the system should break even within the lifetime of the system if worked correctly.
Install free solar panels
- This option for free solar panels is available to those people who either cannot take out a loan or don’t want to pay the high upfront costs associated with the initial purchase of the system. The maintenance costs are taken care of, but you will not receive any of the FIT payments for the 20 year period. You will however benefit from all the electricity they generate and if your home uses a reasonable amount of electricity during the day, then you will realise these benefits with up to a 50% reduction in your electricity bill.
Solar Panel Financial Information
Finance options for Solar Panels
There are a number of companies offering finance for solar technology in the United Kingdom. Finance, in the form of loans and leasing agreements, is available for domestic, commercial and industrial installations, in both the private and public sectors. Finance for renewable energy technologies allows customers to avoid large upfront costs and make payments out of the income from Feed-in tariffs, as well as energy bill savings.
Finance may be offered on a range of bases, each offering varying levels of financial risk and reward, as well as varying interest rates. Typically the finance company will provide the renewable energy technology and the cost of installation in return for payments spread over a period of time. Depending on the type of agreement, the client may either come to own the technology at the end of the period, it may be sold by the company with the proceeds being split between client and company, or the company could retain it.
The arrangements offered by finance companies will vary, however, and each company will offer different advice. It is therefore advisable to obtain quotes and agreement terms from a range of companies, based on clients' energy needs and financial situation. Caution should also be taken when calculating one's ability to make repayments, as the returns offered by some renewable technologies depend in large part on the weather.
In some cases installation companies also offer finance solutions. Some companies also offer the free solar or rent-a-roof schemes discussed here, whereby a company will pay for the installation of a solar PV system on the roof of a home or business. The company will usually receive the Feed-in Tariff income, while the property owner will benefit from reduced energy bills and carbon emissions.
Look Here for some UK companies offering finance for renewable technologies.