Due to falling installation costs, the Telegraph finds that now is the most profitable time to install solar panels.
Did you invest in a “dot com” company like Google early in the 90s? Or were you able to snag a London property back in ‘96 when the price was right? Making the right financial decision at the right time can completely turn your life around, but unfortunately it’s normally difficult to know when the best moment to buy is.
However, a team of experts from the Daily Telegraph have found that right now is the best time to buy solar panels because installation prices are low and government payouts are in a perfect balance. But it’s important to strike while the time is right because installation costs may not continue to fall, and the government is likely to rethink its renewable energy policy at some point after the general election.
Solar Panel Costs Have Fallen £5,000 In The Last Five Years
According to figures from the National Energy Saving Trust, the price of solar panels has fallen considerably in recent years. In June 2012, the average solar panel costed £8,400, that’s £1,500 more than the figure from September 2014, which was £6,800. In fact, it is £5,000 cheaper to buy a solar panel today than it was five years ago. But the rate at which the price of solar panels is falling has slowed. According to experts, homeowners should buy now, because while the technology may get cheaper, there is no guarantee that the price will fall dramatically in the future.
Buy Solar Panels While The FIT Is Still Relatively Generous
Under the Feed-in Tariff (FIT), homeowners are paid for every unit of energy that they generate, which is fixed at the current rate on the day that they signed up for their panels. Currently, the income is guaranteed for twenty years. For example, someone who signed up today would earn just under 14p for every unit of electricity generated by their panels until 2035. According to data from the Daily Telegraph, a typical solar panel set will installed in the summer of 2012 will net the homeowners £226 taxfree annually for the next quarter century – paid directly into their bank accounts by the energy company. Of course, the FIT is only half the equation, the other half is a reduction in energy bills which also helps to make solar panels so lucrative.
However, the government is likely to reassess the FIT later this year. Experts expect the FIT to be cut, because it is reviewed on a three-monthly basis and changed depending on how many solar panels have been installed. With the government on target to reach a million solar panels on British rooftops by the end of this year, it’s fair to say that the FIT payments will fall. This is because the idea behind the FIT is to encourage the solar industry until the technology is cost-effective without a subsidy, a target that the industry is fast approaching. If you think that subsidies for any energy companies are deeply unfair, then you should take a look at the fossil fuel and nuclear industries, which receive an enormous amount more in government subsidies. Unlike the solar industry, the fossil fuel industry shows no signs of being able to survive without a subsidy in the future.
Party politics may also have a role to play in the economics of solar panels. Unlike the Labour party, the Conservatives failed to mention solar panels in their 2015 manifesto. Commentators have noted that this is not a good sign for the solar industry, should the current government be reelected in May.
Is Waiting For Cheaper Solar Panels A Good Idea?
Based on the two points that we have examined, the plateauing of installation costs and the likely drop in FIT payments, it could be dangerous to play the waiting game. Savvy homeowners will order their solar panels now, while FIT payments are secured at a generous level and installation costs are a fraction of what they were only a few years ago. Remember, certain factors can lead to an even bigger return. A south-facing roof in Essex, for instance, gets considerably more sunshine than the national average. It’s also the case that those who are at home during the day and use electricity when the sun is shining will benefit even more.