The current high energy prices — and how to bring them down — has been the subject of water-cooler conversations the length and breadth of Britain. So it should be no surprise that the idea of installing rooftop solar panels is making a comeback. But those considering such lofty renewables should not count on great returns.
If electricity prices were to revert to historic levels, the merits of this investment would almost be entirely down to the carbon savings. For a 4KW array in the UK, Lex estimates those to be 700kg of CO₂, or 84 per cent of a home’s annual power-related carbon footprint.
Take a look at the numbers involved. At an average cost of £1,800/KW, 4KW of solar panels would set one back £7,200. In these overcast isles, these would produce electricity about 1,000 hours a year, or 11 per cent of the time, providing 4,000KWh of homegrown power a year for 25 years.
Trouble is, not all of this would be used by those living under the panelled roof. The sun produces electricity in the middle of the day, while households tend to switch on their kettles and television sets at night.
Say 35 per cent of the solar panel electricity were consumed in-house. That would cut this year’s bill from £1,063 to £640, for the average home, or a £423 saving. By 2030, however, power prices might well have reverted to those experienced pre-crisis, reducing the annual saving gradually to £280.
The energy that is not consumed would not go to waste, of course. It would be sold back to the grid. Different providers offer different prices for this, but these tend to be at a huge discount to the retail cost. A reasonable estimate for this earnings stream might be £300 this year, declining to £200 over time.
If you add together the annual savings and income from the grid and discount them back at 5 per cent, you get just below £8,000, which leaves a net present value of less than £80 before any maintenance cost. For a small business, which uses power when solar panels produce it, the numbers look better. But for the average homeowner, it all looks a bit of a wash — albeit one with environmental benefits.
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