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Solar is still a fantastic investment! 11% returns available tax free, inflation linked!
You may have heard about the recent cuts in the Feed In Tariff. Before the cuts the returns on a solar system were well over 15%. Now the return is not quite so high - more like 11%. But it's still fantastic for an investment which relies only on the sun coming out. And it's still tax free. And it's still inflation linked.
This table shows the returns typically available on various sized systems. These are special prices for orders during November, for install after December 12th. Remember if you are a tax payer, the equivalent pre-tax return is higher - up to 19%!
| System size (kWp) | Approx. cost (inc scaffold!) | Annual generation (kWhs) | Annual FiT payment | Annual savings | Annual export tariff | Total annual savings/payments | First year return | Equivalent return for 40% taxpayers | Payback period |
|---|---|---|---|---|---|---|---|---|---|
| 4.00 | £11,000 | 3,816 | £801.36 | £429.30 | £59.15 | £1,289.81 | 11.73% | 19.54% | 7 yrs 10 mths |
| 3.53 | £10,300 | 3,368 | £707.20 | £378.86 | £52.20 | £1,138.26 | 11.05% | 18.42% | 7 yrs 10 mths |
| 3.06 | £9,880 | 2,919 | £613.04 | £328.41 | £45.25 | £986.70 | 9.99% | 16.64% | 9 yrs 0 mths |
| 2.59 | £9,350 | 2,471 | £518.88 | £277.97 | £38.30 | £835.15 | 8.93% | 14.89% | 9 yrs 11 mths |
| 2.12 | £8,120 | 2,022 | £424.72 | £227.53 | £31.35 | £683.60 | 8.42% | 14.03% | 10 yrs 5 mths |
Click here to see our assumptions
Prices are approximate and depend on installation detail and complexity. Please click here to receive a quotation or to arrange a free, no-obligation site visit.
Annual kWhs is calculated at 954kWhs/kWp, as calculated by the PVGIS calculator for a property near Exeter.
Savings are calculated using 15p/kWh - what you save will depend on what you pay your electricity company for electricity.
We assume you use 75% of your electricity in the home - this is quite possible using careful energy management (see below).
The government assume you export 50% and pay you on this basis.
For the purposes of payback period calculation we are assuming a 6% annual rise in electricity prices and a 4.5% RPI inflation rate.
The key here will be maximising the benefit of the electricity generated on your roof. Every unit of electricity that you use in your home is worth around 14p off your energy bills.
How are the returns still this high?
Let's take a case study. The Williams family are a family of 4 living near Exeter. They choose to invest in a 4kWp system from Spirit Solar on their south-facing roof. They get the system on a great deal, at just £11,000 including scaffolding.
According to PVGIS the system will generate 3,816 kWh of electricity every year. The government assumes they export 50% (this is "deemed", not metered), and use 50% at home. But, by monitoring how much energy their system is generating, and how much energy their home is using, the Williams are able to schedule when they use their appliances, such that they use 75% of the energy generated on their roof.
The financial benefits for the Williams work out at:
(1) Free energy
75% x 3,816kWh x 15p = £429.30
(2) Feed-in-tariff
100% x 3,816kWh x 21p = £801.36
(3) Export tariff (deemed to be 50%)
50% x 3,816kWh x 3.1p = £59.15
Total savings and income
(1) + (2) + (3) = £1,289.81 per annum.
This represents a staggering 11.73% return - and as Mr Williams is a higher-rate taxpayer he would have to be earning 19.54% in his bank account to match this!
Don't miss out on the solar deal!
Limited prices
These prices won't be around forever - they are for orders in November for installation after 8th December.
More stringent requirements will be introduced on 1st April 2012
The government plans to introduce minimum energy efficiency requirements for all houses to be able to install solar PV - this will be an EPC rating of "C" or higher. For some properties this could be very expensive, or even practically impossible.
Get an install before this deadline and you don't have to worry about this.
Further cuts could be coming
The government have committed to a more flexible system to be able to lower subsidies more quickly and without such lengthy consultation processes. This could mean that further cuts for new installers could come at any point. In short, delaying could be costly!
We'll email you a quote
- Get an accurate email quote emailed to you
- Fill in the form and we'll contact you within 24 working hours (9am-8pm Mon-Thu, 9am-5pm Fri, 10am-4pm Sat)
- No need to speak to anyone on the phone!