As more people opt to live sustainably solar panels have seen a huge rise in popularity, and installations have increased by 45% over the last 3 year (source: Gov.uk).
More and more homeowners are realizing the value of solar energy and are benefiting from it.
Naturally, you’ll want know the facts – which is why we’ve listed all the expenses involved in purchasing solar panels, including how you’ll save over the course of a year, and the time you’ll be breaking even.
What is the best time to break even on solar panels?
It’s now possible to break even with your solar panels in 10.2 years, based on our most recent estimates.
This figure is based on houses that get the most amount of sunlight in the UK and is using the average power rate of electricity, and has the most efficient smart export Guarantee (SEG) rates.
This relatively fast return on investment indicates that the golden age in solar energy is now here.
The price for solar panel panels have decreased by 88% since the year 2010 according to government statistics and at just the right moment.
Electricity bills for households are increasing quickly, which makes it more beneficial to make use of solar energy for free – and, with the SEG, you’ll receive 7.5p /kWh to use solar power you don’t need.
The investment return explained
We’ve calculated the cost of a solar array, taking into account the cost you’ll save on electricity costs from National Grid. National Grid, and added the savings you’ll earn from SEG.
What’s the result? Use solar panel installers Peterborough now, and you’ll make a profit in 10.2 years, on average.
It might take even less time to make a profit as we expect that the cost of electricity will remain at a high level for in the coming two years.
Because the standard solar panel warranty spans 25 years and breaking just after 10 years would give you 15 years to save more money using your panels. Many solar panels last for well over 25 years.
In terms of percentage the percentage of returns is exactly the same regardless of you have in your home. The graph demonstrates this clearly in the sense that your expenses remain constant and your savings increase, allowing you to make it to the point of breakeven by 2032.
But, a larger investment will result in greater profits.
It is typical to make an income of around £4,759 from an array of solar panels for a one – or two-bedroom house, and £7,932 when your home has three bedrooms and £11,105 if you have an array that can accommodate four bedrooms.
How we came to it
- In our study we have discovered that the typical solar panel is capable that is 350 kw.
- The typical 3.5 4 kWp panel costs £5,420, as per the Energy Saving Trust, so it is clear that a 350 kW panel will cost £542 (inclusive the installation charges).
- Additionally, we discovered that the typical solar panel can generate 85.25 percent of its output over the course of its life so an 3.5 kW system could deliver approximately 3,000 kWh per year in the an average.
- The average household doesn’t need all of the 3000 kWh, however, since most people don’t stay in their homes all the time. In the past, when the government used provide an export tariff the tariff assumed that you would export 50 percent of the electricity generated therefore we used the figure of 50%.
It means that you’ll consume 50% of the solar energy that you produce 1500 kWh, and the remaining 1,500 kWh will be able to earn you money via the Smart Export Guarantee program.
- This can help you save a significant amount of money in energy costs, but how much will depend depending on your house.
According to Ofgem, an average home that has just one bedroom consumes 1800 kWh per year. an apartment with three bedrooms consumes 2,900 kWh. A home with more than four bedrooms makes use of 4,300 kWh.
- We then multiplied these numbers by the average cost of electricity in the UK which amounts to 28.3p per unit, as per the Energy Saving Trust, to determine how much each household is paying in electricity bills each year, and the amount they’d save through solar power.
A typical three-bedroom house is, for example, expected to typically be paying £844 annually for 2,900 kWh. However, with an 3.5 Kilowatt solar array that generates 1,492 kWh of power that the family uses and the homeowners will save £422 annually.
- We figured that families would select the most expensive Smart Export Guarantee rates currently in the market, which doesn’t require switching suppliers or buy an extra piece of costly hardware.
We then multiplied the rate that is 7.5p for each kWh derived from Octopus by the amount of electricity that each household sends directly back into grid. The average house with three bedrooms in the example above, earns £111.89 per year by exporting 1,492kWh of its solar energy.
- We didn’t consider the cost of maintenance in our calculation. If you’re able to clean your solar panels at least once a year, that’s cost-free, while the primary cost – replacing the solar inverter – is decreasing constantly.
Inverters’ costs are expected to drop in line with the steady decline in the cost of solar panels for homes that have decreased by 50% from 2011 According to the government. Additionally, the price of electricity continues to go upwards. We believe these trends will be in opposition to each other.
The variables that influence the break-even point
Let’s get into greater detail on everything that affects your investment return in solar panels.
Location
The amount of time each year that the sun is shining is different throughout the United States, which you’ll be able to tell if you’ve had some time in various regions of these islands.
This directly affects the amount of energy you generate. For instance, homes located in North Scotland receive 1,080 hours of sunshine every year, while the fortunate ones located in East Anglia enjoy 1,570 hours in accordance with the Met Office.
This is 45% more sunlight and that’s the sun is generating 45% more energy. It’s a significant improvement.
The Smart Export Guarantee Rate
The Smart Export Guarantee compels large producers to pay their customers in exchange for renewable electricity they sell into National Grid. National Grid.
It means you’ll get an amount of money for solar energy you do not use (which is about 50%, in the average.
But, different providers offer different rates, which range from E Energy’s incredibly cheap 1p per kWh, and the Octopus’s 7.5p for kWh.
Be sure to get the most expensive rate since it will cost you £112 each year in the average.
Solar battery
It’s also more profitable to utilize the solar energy you generate rather than sell it to pay Smart Export Guarantees – and this is the reason solar batteries are so useful.
A solar battery could allow you to make use of 30 percent more solar energy, as per E.ON.
This will cost you an additional £186 each year. The average solar battery costs around $4500, delay the break-even point of the solar array for 20 years on average.
But it also improves your energy independence and decreases carbon dioxide emissions by about 18 tons.
The amount of electricity you use
The more electricity your home utilizes while the sun shines the more solar energy you’ll consume and the more you’ll save on electricity through grid power like the National Grid.
But, if you don’t own a solar battery , and make use of electricity during the night, you could be able to save dollars each year by using the solar panels.
If you’ve got intelligent controls that are smart, you’ll be able ensure that appliances such as dishwasher, washing machine and electric car recharge using solar energy which is a huge lot.
The cost of electricity
The cost of electricity purchased via National Grid National Grid at its current cost is quite expensive, which is why you’ll save money by using solar energy for free than you did just a few years ago.
Instead of having to pay £844 annually A house with three bedrooms could be paying £310 which is a savings of 63 percent.
As the price for National Grid electricity continues to increase, you’ll save more in the coming years.
“Smart Export,” the Smart Guarantee
The Smart Export Guarantee (SEG) was launched on January 1, 2020. The scheme requires all big energy companies within the UK (i.e. that have at minimum 150,000 consumers) to pay the households for the renewable energy they provide into National Grid. National Grid.
However, small energy companies are opting to participate also, which means that there’s a lot of competition.
There are a few energy companies that are currently offering at the very least 5.5p for each one kWh of renewable power that household members export back to grid.