Tuesday, 14 October 2014

Are Solar panels still a good investment despite Feed In Tariff drop?

Do Solar panels still give a good investment return?

The Feed In Tariff (FIT) rates have plummeted since 2011 but are solar panels still a good investment? When FITs were announced in 2010 the cost of solar panels were around £16,000 for a 3-4 kWp system and FIT payments were around 45p per kWh generated.

Do Solar panels still give a good investment return?
Do Solar panels still give a good investment return?
Since then FIT rates have dropped substantially but solar panel installation prices have done so too meaning that the relationship between solar PV panels and FIT has stayed roughly the same. The main difference between the returns now and in 2011 is that the current Feed in Tariff is only guaranteed for 20 years rather than the 25 years for the pre-2011 FIT rates.

So £16,000 for a system paying 45p FIT is much the same return as a £5000 system being paid out at 15p FIT rates. The solar electricity generated will be the same for a system regardless of the FIT rate paid so the returns should be comparable.

Do you agree or do you think that solar is no longer a good investment?

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