Solar Electricity Installations by Heatpro
You may have had an offer for ‘free solar PV’ fitted to your roof, it is an offer that sounds almost too good to refuse, with all the recent advertising and publicity surrounding these schemes I am sure that you have heard of these offers and thought what’s the catch?
A company offers to install £15,000-worth of solar panels on your roof absolutely free; in return you get £150-£230 worth of free electricity for the next 25 years, but why would a private company be so happy throwing money at you, what’s in it for them?
What they're after is the super-lucrative "feed-in-tariffs" (Fits) worth £900 to £1,450 a year they will be paid by your electrical supplier for covering your roof in photovoltaic cells, ever since the introduction of Fits, City investors and hedge fund managers have been looking at ways to cash-in on the deals that have transformed solar take-up in other parts of Europe, this is now happening in Britain.
So what is the 'free' deal?
If you can't raise the finances to install solar panels yourself, and you have a suitable roof it is, on the face of it, a great offer.
In return for signing a 25-year agreement to house the panels, you will get the electricity generated by the system during the day, assuming you're in to use it. Research shows a typical householder will save about 30% of their bill, though by changing behaviour (running washing machines etc during the day) this can increase substantially.
As electricity prices rise, the savings will grow.
What do the companies make?
In return for their investment, likely to be £11,000-£16,000 depending on the size of the system, they pocket the lucrative Fits for every unit of electricity generated –currently 41.3p per KWh irrespective of whether you consume the power generated at the time or not.
Once you add in the export tariffs (for power not used), the total payments are worth about £900-£1,450 a year or £25,870.00-£38,687.00 over the 25 year term.
The feed in tariff is guaranteed for 25 years, are payable via the utility company, and will rise in line with inflation. By any stretch of the imagination, the roof rental companies are making a great return from your roof.
If you pay for the installation of panels yourself can you take this money?
Yes – and if you have a suitable roof, plus the ability to raise £15,000 (typical cost for a 4kW system), we recommend this is what you should do.
Current remortgaging rates are no more than around 5%-6%, and often lower, Interest on savings are typically only 2-3% with ISA’s not much better, but even if you end up paying 12% interest you will still make a huge profit.
Most calculations suggest buyers will be able to pay off the costs after nine to 10 years, depending on how much they pay for finance. A typical household will make a risk-free profit of £20,000 over the 25 years while enjoying lower electricity bills.
Effectively, customers using a company offering a 'free' solar photovoltaic system may be getting around £230 free electricity per year, but may not appreciate they are giving away a cash income of more than £35,000 over 25 years from a system that would cost around £15,000.
| Size Of System | Electrical Savings Per Year |
Feed In Tariff Payments Per Year |
Total Installed Cost Of System |
Payback Period | Total Return over 25 Years |
|---|---|---|---|---|---|
| 1.5 | £175.00 | £558.00 | £4,900.00 | 6.3 Years | £21,325.00 |
| 2 | £232.00 | £743.00 | £5,500.00 | 5.3 Years | £28,400.00 |
| 2.5 | £289.00 | £929.00 | £6,500.00 | 5 Years | £35,500.00 |
| 3 | £348.00 | £1,115.00 | £7,500.00 | 4.8 Years | £42,600.00 |
| 3.5 | £405.00 | £1,300.00 | £8,900.00 | 4.9 Years | £49,700.00 |
| 4 | £463.00 | £1,486.00 | £9,950.00 | 4.8 Years | £56,800.00 |
If you are unable to raise the finances to have your own system installed the free solar PV schemes are a very good offer as they will help you to reduce your electricity bill, however we hope to have demonstrated that if you can raise the finances yourself solar PV is a fantastic investment that will provide you with:
A reduction in your electricity bill.
- Increase the value and saleability of your property.
- Provide a much higher return than traditional savings or investment schemes.
- Reduce your carbon footprint.
With ever increasing gas and electricity bills’ having solar PV installed makes complete sense as you will save money year on year.
We would welcome the opportunity to discuss solar PV with you and answer any other questions you may ask simply call us on 0115 930 5838 and one of our Solar advisers will be happy to help or email us on sales@heatpro.co.uk
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| NAP 13920 | 72894 | 23459 | 3414 |