The end of the Solar-Coaster
The installation of residential solar panels is a sector which has been knocked back over the years – but lower costs mean there’s a new opportunity for home owners looking to reduce their reliance on expensive grid energy.
The PV industry has seen so many ups and downs over the last decade that solar professionals begun referring to it as the ‘solar-coaster.’ High government subsidy back in 2010, in the form of the Feed in Tariff (FiT), saw an unsustainable solar boom. But as FiT rates fell over the years, so did interest in PV for the home.
But 7 years later in 2017, the cost of solar panels has fallen so significantly that PV has become a sustainable business, and this time for good. For householders and commercial businesses with high electricity demand, solar panels can provide as good a rate of return as when the Feed in Tariff was at it’s peak – and without the need for subsidy.
Cost-effective solar without subsidy gives the industry an unprecedented, secure foundation. The ability to save money by installing solar panels on your roof has never been so simple. As more people take advantage of new low prices, the costs will continue to fall. Welcome to the solar revolution.
Saving through self-consumption
Where generating and exporting was once the main source of revenue, self-consumption is now ensuring that solar panels provide competitive, clean energy – and new battery storage technology is helping consumers take full advantage of that. Across the world, PV has passed a tipping point and is able to outcompete all fossil fuels.
The best part about this is, these low costs are available for home solar panel systems – providing domestic energy users with the opportunity to undercut their suppliers by investing in solar PV.
Solar for the home – payback without FiT
Take your average domestic 4kW solar PV installation. Ten years ago, a system of that size would have cost somewhere in the region of £15,000-£17,000. With a FiT rate at c.£0.44/kWh, you’d have been making c.£1,500 per annum. So, your system would need to be generating and exporting energy for 10 years or more before the system would cover its install costs.
By optimising self consumption in the home Solar South West have been seeing an average of around 7 years payback for domestic PV systems installed over the last year. This vastly outcompetes solar PV systems which were installed 10 years ago.
Last decade, a solar system was still significantly too expensive for the vast majority of average family households to consider investing in. Now PV will pay for its installation costs quicker than ever before, and the lower price makes it more accessible to the general public.
Energy prices are set to rise massively in the near future. Expensive infrastructure improvements will imminently be unavoidable for the UK distribution network, which will be paid for by consumers. In addition, we are yet to begin paying for the construction of Hinkley Point C (HPC).
The contract with EDF for HPC is arranged such that the UK will not begin paying for the construction of the nuclear power plant until it has begun producing energy. When this happens, UK consumers are tied in to paying £92.50 per megawatt-hour generated – for 35 years!
Considering that a Chilean solar farm signed a contract last year to provide (renewable) energy at just $29.10 per megawatt-hour, this is not good news for UK energy consumers. The government has effectively tied consumers into paying double the wholesale price of energy for the next third of a century – so the value of free solar generation will only increase going forwards.
Concrete pouring underway at HPC – source: EDF Energy
A worthwhile investment
Solar has never shown more potential benefits than it does to consumers installing systems now. By investing in solar PV at the much more accessible modern cost, not only will you get the best rate of return solar has ever offered, whilst also cleaning up your energy consumption and setting an example for future generations. You will also be protecting yourself against the unavoidable increase in UK energy costs in the much more foreseeable future.