Buying solar panels is a long-term investment that should help cut your electricity bills and carbon footprint. But will they pay for themselves and earn you money? And could they affect the value of your home? Read on to find out more.
Solar panels are often marketed as a way to save money on electricity, and sometimes as a way to make money too. This is because you can get paid for the electricity they produce and you don't use.
Keep reading to find out how long it's likely to take to break even if you buy in solar panels, and how much you could earn from them.
Plus our unique survey of estate agents reveals the effect solar panels will have on the value of your home.
How long it will take for your solar panels to pay for themselves, and whether you can make money from them, will depend on:
A more expensive system upfront will need to be balanced with how much money you can save by using the renewable electricity it generates (instead of buying power from your energy firm), plus how much you can earn from selling any excess.
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The amount you earn from either the SEG, the FIT or the savings you make by using the renewable electricity your system generates can be affected by:
Some companies market solar panels as a money-making investment. But there are significant differences between traditional options (such as savings and investments) and buying and installing a solar panel system.
It you already receive Feed-In Tariff payments, they are guaranteed for between 20 and 25 years (depending on when you had the panels installed). The price per kilowatt hour you're paid changes annually with the Retail Prices Index (RPI) and any money you make is tax-free.
If you'll be getting paid for electricity via a SEG tariff, they have less long-term security. Fixed tariffs are valid for a certain period of time (typically 12 months), after which you'll need to find a new one. Variable tariff rates can change when companies choose.
Boost your savings and earnings from solar PV by putting them into a cash Isa, regular savings account or even a high-interest current account.
The most cost-effective way to pay for the installation of solar PV panels is upfront and in full.
If you don't have the cash to pay upfront, you could consider a loan or remortgaging. You'll have to pay interest on any money you borrow and loan repayments could exceed the returns you make from the solar PV system, so make sure you do your calculations carefully.
Don't assume that solar PV installation will guarantee a comparable increase in the value of your property. In fact, the majority of estate agents we surveyed** think that having solar panels makes no difference to how much your home is worth.
Just 8% said they thought solar panels increased property value, and 17% said they decrease its value. But 67% of estate agent businesses told us that having solar panels makes no difference to the value of a property.
According to a survey of 1,252 estate agency businesses, conducted by NAEA Propertymark for Which? in June 2017.
These factors can all have an impact, too:
Also, remember that the system's inverter might need changing over the 25-year period and that, over time, the panels will reduce in efficiency. These factors need to be considered if you invest in solar PV and want to sell your home later on.
If you’re buying a property with solar panels installed, it’s worth getting a surveyor to check them.
**NAEA Propertymark surveyed 1,252 estate agent businesses for Which? in June 2017.