Subsidy cuts – Should I still be thinking of solar ?

Many people will now be considering this question. The cuts don’t only affect larger solar installations like those on community and industrial buildings, but also apply to small systems such as you might wish to install on your home.

First the nitty-gritty “How much will solar cost me?”  For some years now the price of solar has been dropping consistently, some might even say, dramatically.  This price reduction has made residential solar much cheaper over a very short period of time.  Five years ago you could expect to pay £15,000 for an array (4kW) now that is around £7,000 or even less.

Added to this there has been the added incentive of the Feed in Tariff.  Until very recently you could expect to receive a subsidy of 12.47p per kilowatt hour but this was recently cut to just 4.39p.

So does it still add up?

Well, there is no doubt that in purely financial terms is far less attractive, with an expected payback of around 17 years for a 4kW system.  With the Feed in Tariff available for 20 years you could expect to see a net return of around £1000.

The good news is that the expected lifetime of the panels is well over 20 years and they can continue to produce electricity for 40 or 50 years and don’t forget that over the lifetime of your solar array you will benefit from reduced electricity costs and save around 1.7 tonnes of CO2 per year.

It’s tried and tested technology with very little maintenance requirements but maybe with the cuts to the tariff, environmental issues have become more of a driver than earning money.