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Can Solar Systems Still Make a Good Investment?

December 4, 2012

Solar systems can still make a good investment for domestic customers, mainly due to the government Feed-in Tariff Scheme for solar photovoltaics.

The Feed-in Tariff is actually two tariffs; a generation tariff paid for every kilowatt hour (kWh) of energy generated and an Export Tariff, paid for every kWh fed into the national grid from a particular property.

The Feed-in Tariff is paid whether you use the energy in the home or not which means the Export Tariff is paid for energy not used in the home. As the Feed-in Tariff is higher than the Export tariff, it makes sense for homeowners to use the energy in the home as much as they can.

Although the domestic Feed-in Tariff has dropped from a historical high of 43p to its current rate of 15.4p the price of solar photovoltaic systems has also declined. Previously, a 4Kilowatt peak (kWp) solar system could cost as much as £16,000 whereas currently systems are available for around £6000. The Export Tariff has also risen, offsetting the cuts in the Feed-in Tariff.

Potential Returns
A well sited 4kWp system can bring excellent returns to a household. The below example uses a house with an orientation within 25 degrees of South and a roof pitch of between 16 and 37 degrees. This is an industry standard SAP 2009 calculation.


The above example shows that on the Feed-in Tariff alone, a system of this kind can expect a good rate of return. When bearing in mind the added benefit of the Export Tariff and and savings on bills, the investment can add up to over 13% per annum for 20 years. This example assumes that 50% of energy is used in the home.

For more information or a tailored quotation, please call us on 0114 266 6229.

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