Asking “how much do solar panels cost?” is a little like asking “how long is a piece of string?”. The problem is that so many factors need to be taken into account before you can fully work out exactly what the cost is going to be and probably more importantly, what the actual value of solar panels is.
The average price and extra costs
If you wanted to find out how much do solar panels cost you can easily find an average amount. Most domestic photovoltaic systems will cost anywhere from £1,800 to £2500 per kWp. This includes the installation and the more panels you install the more economies of scale you achieve.
The average three bedroom home will require at least three of this size panel and so the cost will average out at around £5,500. While this may sound like a significant amount, it is actually much less than the cost of solar panels has been in the past and the cost is coming down all the time as the technology improves.
Your solar panels will not require very much at all in terms of maintenance. Over a 25 year lifetime you can expect to pay around £1,000 for a replacement inverter. Other than that, all they need are an occasional clean and to be kept clear of overhanging trees.
You may also wonder how much do solar panels cost for my home insurance? You should make sure that your system is properly insured on your home buildings policy and this may increase your premium, but not significantly. They do not need separate or specialist insurance.
What return can I expect on my investment?
Despite the reduction in the feed-in-tariff to approximately half of its previous levels, there is still significant money to be made from the installation of solar panels of around 8%-12%.
|Average cost to install||£6,000||£4,625||£3,250|
|Electricity generated (annually)||3604 kWh||2703 kWh||1802 kWh|
|Annual feed-in tariff income||£636||£479||£320|
|Annual electricity bill savings||£252||£189||£121|
|Total annual income and savings||£890||£668||£445|
|Payback time||6 years||6.5 years||7 years|
|Return on investment||14.8%||14.4%||13.7%|
Solar panels generate ‘clean energy’ and are a more environmentally friendly way to power your home. The average home can expect to save around a tonne of carbon dioxide every year, dramatically reducing your carbon footprint.
The Green Deal
From later this year the government will be offering home-owners the opportunity to take out a loan to cover the cost of improvements such as solar panels. This Green Deal loan is guaranteed to cost less to repay than the savings made from the solar panels. The debt itself will be attached to the property and therefore will be “sold on” if the house is moved to a new owner.
There has been some criticism that the interest rates will be at commercial levels, but the government has suggested that incentives may be offered to offset this.