Solar PV still attractive tomorrow!
STA explains value of solar investment to domestic consumers
New
calculations show that investing in solar will continue to be
attractive for domestic properties despite the reductions in the Feed in
Tariff (FiT) tomorrow when the FIT for domestic systems will reduce to
16p and the FIT lifetime will reduce to 20 years. However, the price
paid for power exported back onto the grid will increase to 4.5p
tomorrow, better reflecting the true market value of locally generated
power.
A returns ‘Calculator’
devised by the Solar Trade Association (STA) [1][2] for its members,
based on credible data, clearly shows the good returns that domestic
customers can expect.
Returns
for investors in solar power over recent months have been exceptionally
attractive [3] and the rate of solar installations is again on a steady
upward trend, after a drop-off in April. The new calculations mean the
STA and its members are confident that investment in solar will still be
attractive when the Tariffs reduce tomorrow (1st August).
The
STA Calculator illustrates returns with the following example: for a
family installing a large 4kW system in August costing £8,000, using 50%
of their power in the home and exporting 50%, the STA Calculator
shows the system will have paid for itself within 10 years, with
returns of 9.2% over the 20 year life of the Feed-in Tariff [4]. The
solar power system itself is likely to last around 40 years providing
many years more of household savings!
Householders
are advised (for example by REAL) to always get 3 quotes for solar
installations as solar prices continue to come down and it may be
possible to better the example cited. The REAL Assurance website
provides top ten tips for consumers thinking of generating their own
energy [5]
STA CEO Paul Barwell said;
"Our
figures show that solar is a no-brainer investment. Compared to the
returns you can get these days in banks and many other investments,
solar provides a very solid and attractive return. That is particularly
the case if you consider energy bills are rising faster than anyone
expected.
“Investors
in solar are also helping us to drive an exciting energy revolution,
putting power in the hands of everyday people, while saving the planet."
The STA Calculator
is based on the Government's own projected increases in electricity
prices and on established national average yields from solar power. In
practice electricity prices are rising faster than Government is
projecting and power yields from solar in some parts of the country are
higher. Consumers who use more than 50% of the power their solar
generates in the home can expect higher returns, while returns will be
lower for consumers who use less.
Returns are likely to be even better because electricity bills are rising faster than Government figures suggest:
Because
solar partly replaces the import of electricity from the grid, this is
an important part of the returns calculation [3]. In reality electricity prices are rising faster than the Government data used in STA's model predicts.
This means households could save even more money by switching to solar.
Analysis of Government statistics by the REA shows that the average
annual increase in electricity bills for the period 2005 to 2011 was
6.6% above inflation. While the STA Calculator is based on
conservative assumptions, using this real-world rate of increase in
electricity prices means returns on the example above of a 4kW system
for a family home installed in August, rise from 9.2% to 11.4%, with payback after 9 years.
Paul Barwell said:
“Nobody
knows what electricity prices will be in future but we do know they
have gone up substantially over the past few years. This trend may well
continue as the UK becomes more reliant on importing its energy in an
increasingly competitive world.
“Solar
gives people the opportunity to take control of their electricity bills
and help us move away from damaging fossil-fuel dependence. We believe
the smart money is on solar.”
