Why Solar Panels Are Cheaper in the Long-term
Most people rightly argue that installing a solar panel system at home isn’t cheap because of the initial investment required. However, it’s essential to recognise that such a system is a long-term investment with returns that far outweigh the initial costs involved.
Prices of solar PV systems
Generally, the costs of solar PV systems will vary based on the structure of the building on which the PV system is installed, the type of solar system and the size of the system. On average, a PV system of 4kWp (kilowatt peak) ranges from £5,000 to £8,000. Also, it’s important to note that solar tiles are more expensive than traditional solar panels.
Prices coming down
So once you install solar panels in your home, although you’ll incur initial acquisition and installation costs, you will also benefit from savings on your electricity bills. Additionally, if you installed your solar panels before March 2019, you will be paid under the Feed-in Tariff (FiT) scheme.
The FiT scheme was based on the assumption that the cost of solar panels will eventually drop as their adoption increases. Currently, residential solar panels are over 50 per cent cheaper compared to 2011 prices.
The UK’s feed-in tariff (FiT) scheme was designed to pay commercial and domestic green energy producers for any electricity they generate and supply to the grid. So, even if you incur high costs when installing solar panels, you’ll also benefit from the (FiT) scheme if, as already mentioned, you installed your solar system before March 2019.
The Smart Export Guarantee (SEG) will keep solar panel prices low
Although the FiT scheme has now ended, all hopes of getting cheap solar panels aren’t lost. On June 10 2019, FiT’s replacement, the Smart Export Guarantee (SEG), was officially introduced. Under the new programme, residents and businesses who create and export solar electricity to the grid will now receive guaranteed payments from suppliers.
It’s worth noting that SEG is building on the FiT scheme, which brought about the installation of over 800,000 small-scale renewable projects, while also reducing the cost of residential solar panels.
Specifically, SEG will ensure that small-scale electricity generators who install any form of renewable energy up to a capacity of 5MW receive payments for each unit they export to the grids. To simplify accountability, SEG stipulates that smart meters will be used to track all the units sold to the grid.