10 Dec 2014 11:12:48
Rate of Return from Domestic Solar PV in the UK is at a Near Record High Thanks to a 62% Fall in Costs
Energy website Green Business Watch has released research showing that the rate of return for domestic solar panels in the UK is at a near record high.
The report on "UK Domestic Solar Panel Costs and Returns 2010 - 2014" finds that median installation costs for typical domestic solar panel systems have fallen by around 62% since 2010. It analyses available cost data, together with FIT rates and electricity price data to compare costs and returns available from solar panels at various points during the period.
The Feed in Tariff scheme pays UK energy consumers for the power they produce through renewable technologies including solar panels. Householders and businesses are paid a tariff for every Kilowatt hour (kWh) of electricity generated and an extra tariff for unused energy that is “exported” back to the grid.
The rate of return currently available from domestic solar PV was found to be significantly higher than when the scheme was designed. Despite reductions in the Feed in Tariff over the last few years, the rate of return for a well sited 2.6kW solar panel installation has risen from an estimated 4.12% in 2010 to 7.81% in 2014.
The study highlights the impact of falling installation costs and rising electricity prices over the last few years, which have offset reductions in the Feed in Tariff rate. FIT rates are guaranteed by the government and index-linked for the 20 year term of the tariff. They are also free from tax, making the returns from solar PV even more attractive.
Editor of Green Business Watch, Alastair Kay commented, “We wanted to compare how tariff rates, cost reductions and rising electricity costs have affected solar as an investment in the last few years. It is pretty clear that well sited domestic solar is providing really attractive returns, significantly above those when FIT started in 2010.”
He added further, “A system that would have cost £13,000 in 2010 may be under £5,000 today and that makes solar panels an option for more and more households, which is great.”
You can access the full report here:
About Green Business Watch:
Green Business Watch connects UK consumers and businesses to installers of renewable energy. Visitors can find information and commentary on the various renewable technologies, grants and funding and can connect directly with local installers to discuss their individual projects.
Alastair Kay, Editor
020 3290 9427