Costs
A typical 2.5 kwh photovoltaic solar panel installation costs around £13,000 including VAT. Installation costs vary with the size of building.
Savings
On December 12th 2011 the govenment reduced the Feed In Tarriff by 50%. The savings outlined on this website were therefore expected to be halved, approximately, from this date. However the decision was appealed and the government lost.
This decision is a damaging blow to Ministers and officials at the Department of Energy and Climate Change, who must now introduce the contingency date of March 3 for the start of the 21p rate for solar PV and not the original December 12th deadline.
The court judgement also means customers who have had solar panels installed and are registered ahead of the new March 3 cut-off point will now receive the original 43p rate for 25 years.
Customers who register on or after March 3 will qualify for the current higher rate until April 1, when it will drop to 21p.
For every unit of electricity you produce you receive a payment (41.3p) even if you consume this power yourself. In addition if you feed electricity into the national grid you will be paid an additional payment (3.0p) known as a Feed in Tariff (FIT).
These payments are guaranteed for a period of 25 years and are index linked so will increase with inflation.
Savings Example
We assume a family of 4 living in a 4 bedroom home using 9000 kwh per annum at 13p per kwh (approx).
Original energy cost = £1170A 2.5 kwh (peak generation) scheme is estimated to generate 2,000 kwh (approx) attracting a 41.3p per kwh payment.
Generation payment subsidy = £826The Energy Savings Trust assumes a house uses 50% of the electricity generated and exports 50% to the national grid at 3.0p kwh.
Feed in Tariff subsidy = £30Remaining electricity to be purchased from the supplier is 8000 kwh at 13p kwh.
Electricity board costs = £1040 New annual cost of electricity is £1040 - £826 - £30
New energy cost = £184Total saving on electricity is £1170 - £184
Total savings = £986Assuming setup costs of £13,000 the annual investment return on this sum is £986.
Return on investment = 7.6%This return on investment is very attractive when compared with current bank rates. Note that estimated savings are only approximate as electricity consumption varies widely between dwellings depending on whether electricity is used for heating etc.
Future costs
Microgeneration schemes will save more money in future as fuel prices increase.
The cost of energy will undoubtedly increase in future. Reserves of north sea gas (used to generate electricity) are diminishing. Alternative gas supplies are increasingly controlled by Russia with a real possibility of political interference. Our nuclear power stations are due to be decommissioned. The future of energy in the UK is uncertain.
Microgeneration schemes based on photovoltaic solar panels not only help to save the planet by reducing carbon emissions they also produce clear cost savings for participants.
Solar Energy North West Ltd
We recognise that generating payments are a major consideration for all our customers, both private and commercial. Solar Energy North West Ltd will happily calculate the savings to which you are entitled and will work with you to minimise your costs in commencing a microgeneration scheme using PV solar panels.
Go Green and save money - fit solar panels
