Solar panels are a long-term investment which can help reduce your carbon footprint and electricity bills. They will not only pay for themselves, but they could also make you money. Could they impact the value of your house? Continue reading to learn more.
Solar panels are often promoted as a way of saving money on electricity and as a way of making money. Because you get paid for electricity that they produce, but not use, this is a common marketing strategy.
Continue reading to learn how long it will take for solar panels to pay off and how much you can earn.
Our unique survey of estate agents also reveals how solar panels can impact the value of your house.
How long does it take for solar panels to pay off?
It will depend on how long it takes for solar panels to pay off and whether they can make you money.
The cost of your solar PV system
How much electricity you can use
How much and what you get paid for electricity exports.
The upfront cost of a system that is more expensive will have to be weighed against the amount you can save using renewable electricity instead of purchasing power from your energy company, and how much you can make from selling excess.
By finding the lowest SEG tariff rate, you can reduce the amount of time it takes for your solar system to pay off. This will allow you to get more electricity produced.
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You can also receive Feed-In Tariff payments if you have your solar panels for a long time. This means that you get paid for the electricity you produce.
What factors affect the payback time of solar panels?
You can influence the amount you earn either from the SEG or the FIT, as well as the savings you make using renewable electricity generated by your system.
Changes in electricity prices These changes affect the amount you can save on your electricity bills. Your savings will be greater if electricity prices rise.
Installing solar panels can be expensive. A lower upfront cost may mean it is easier to break even. However, a smaller system might generate less electricity.
Rates for SEG tariffs These rates can vary widely between companies. Fixed tariffs guarantee the same rates for the duration of the agreement, while variable tariffs are subject to changes in electricity prices (for example, rates linked to wholesale costs).
Inflation If you have signed up for feed-in tariffs, this will affect your payments. They adjust in line with RPI every year.
Solar panel investing tips
Solar panels are often marketed by companies as a way to make money. There are many differences between traditional investment options, such as savings and investments, and solar panels.
Feed-In Tariff payments are guaranteed for 20 to 25 years if you have already received them. This depends on the date you had your panels installed. You will be paid a price per kilowatt-hour that changes each year according to the Retail Prices Index (RPI). Any money earned is exempt from tax.
A SEG tariff will pay you for electricity, but they are less secure over the long-term. Fixed tariffs can only be valid for a specified period (typically 12 month), and then you will need to search for another one. Companies can choose to change variable tariff rates.
You can increase your savings and earnings through solar PV by placing them in a cash Isa or regular savings account, or even a high interest current account.
Solar panels cost
Installing solar PV panels in full and upfront is the most cost-effective method to pay.
You can consider getting a loan or refinance if you don’t have enough cash. The interest you pay on the money borrowed and the loan repayments you make could outweigh the benefits of the solar PV system. Make sure to do your calculations well.
Another option is to enter into a “free solar panels and solar buyback” or “rent-a-roof” scheme, but we recommend caution.
Can solar panels impact the value of my house?
You shouldn’t expect a similar increase in property value with solar PV. According to most estate agents, solar panels do not affect the value of your home.
Only 8% of respondents said solar panels increase property value and 17% said that they decrease it. However, 67% of estate agents told us that solar panels do not affect the property’s value.
Solar panels have an impact on the property’s value
Property value increases by 8%
17% – Lowers property value
67% does not affect property value
8% – Don’t Know?
A survey of 1,252 estate agencies was conducted by NAEA Propertymark, Which? in June 2017.
All of these factors can have an effect.
The age of solar panels
Whether they are owned by a company or the homeowner
Their influence on the property’s appearance.
Remember that over the 25-year term, the inverter may need to be replaced and that panels’ efficiency will decrease over time. If you plan to sell your house later, these factors should be taken into consideration.
It’s worth hiring a surveyor to inspect solar panels if you are buying a property.