Where can you get a return of over 10% on an investment, tax free, in these days of almost zero interest rates and low inflation? Well, the answer is up on my roof! Yes, solar panels.
A couple of years ago, we took the plunge and made enquiries about the practicalities of installing panels on top of our rather tall house. We had it surveyed and were delighted to hear that the roof would be an ideal location. It faces south south east and is at the rear of the house so the panels would not be visible from the road. It was calculated that 14 panels would generate 3000 kwh per year and that they would pay for themselves within seven years. So we went ahead and placed the order. Scaffolding was required for the installation but, nevertheless, the total bill only came to £6600.
That was in the autumn of 2014 so I’ve now got almost three year’s worth of bills and statements to assess the economic viability of the installation.
Firstly, our electricity bills have decreased substantially because we use, free of charge, any electricity we generate during the day. OK – we’ve changed our routines a little. The washing machine and dishwasher are used during the day, never at night. Hot water on tap (see what I did there!) so that we only occasionally need a boost from the immersion heater. Comparing our last twelve months consumption to the final twelve months prior to panels being installed, we have saved over £180 in hard cash!
But the more obvious benefit is the money that is paid in to our bank every quarter. We get paid money for generating electricity – called the Feed In Tariff. All excess electricity generated by our panels is fed back down the cables into the grid and we get paid for it. So every morning, when I open the curtains and see the sun shining, I know that my bank balance is going to benefit!. Again another calculation reveals over the last twelve months I’ve been paid £483 by way of FIT.
So, combining the Feed In Tariff and the savings on my bills, I have received a total of £667 in the last twelve months, a tad over 10% return on my investmnt. Beat that if you can! Of course, there’s an environmental benefit to this as well. The specification for our installation also calculated that the panels would save over 1.6 tonnes of CO2 over the life (25 years ) of the panels. That makes me feel even better.
Which all prompts me to ask the obvious question – why am I in the minority. Why on earth doesn’t everyone put panels on their roofs? Go on – you can see it makes sense!