How do I get paid for solar?
Owners of solar panel systems will benefit in three ways. Firstly, the government are incentivising people to produce their own electricity by paying a ‘Feed in Tariff’ (FIT). This is paid at 14.96p per kWh of electricity produced, with most systems generating £400-£500 tax free income per year, and guaranteed for 20 years from installation.
The second way is via the ‘export tariff’, whereby the excess electricity you generate is sold back to the national grid at 4.6p per kWh. Your energy company is required to pay you for a minimum of 50% of all the energy you produce on the assumption that the other 50% is used by you, regardless of whether that amount of electricity is actually exported or not.
Finally, due to producing and using your own electricity, you are no longer buying daytime electricity from your energy supplier, reducing your bills by 40-60%. Since energy prices are set to increase 12-18% per year (Source: OFGEM) this will save you tens of thousands of pounds over a 25 year period.
In addition to these solar benefits installers fit a voltage optimiser as standard, protecting your home from electrical surges and saving you money, by stopping you from importing unwanted excess electricity.
What guarantees do I have that I will hit the figures quoted?
Installers are regulated by the MCS who ensure all solar calculations and financial forecasts provided in the UK are the absolute minimum to safeguard your financial expectations and installers’ reputation as a quality supplier of solar systems to households nationally.
The figures in the SAP calculations are based upon solar panels that are working at 80% efficiency (your solar panels will be brand new so working at 100% and will continue to operate at up to 98% efficiency for decades).
The UV radiation factor used in the calculations is based on the UK average, which is in effect the Midlands of the England, whereas in the South of England homes receive 15-20% more UV radiation because we further south and the south enjoys more sunnier days than the Midlands and the North of England, hence you’ll be producing more electricity and receiving higher payments from the Feed In Tariff and the Export Tariff.
All this means you can reasonably expect roughly 25% – 30% more income than quoted in the SAP calculations, and you’ll be producing around 25% – 30% more free electricity for your home. Your FIT income figures are guaranteed by the Government, and in the highly unlikely event that after five years they haven’t been achieved, reputable companies can reimbursed any deficit. As we have mentioned before this scheme is backed by the Government and The Department for Energy and Climate Change are actively looking for solutions to decarbonise the UK economy and reduce the carbon output from UK homes.
Where is the money coming from?
The money to pay for all of this is already there, in fact you have been paying for it for the last four years. Included in your energy bills is an 11% carbon tax, which is a similar tax to that which paid for the ‘free’ cavity wall and loft insulation scheme run by the government CERT (Carbon Emission Reduction Target) scheme a few years ago. £400,000,000 has already been set aside for FIT payments for solar, and is expected to be in the region of £7.6 billion 2020. The Government is committed to solar energy now and into the future.
Do I have to pay tax on my additional income from the Solar Panels?
No. You will not be paying tax on your income from the FIT or Export Tariff. It is a tax free income for 20 years. The Government have guaranteed the income from your solar panel system will be tax free. The Government are encouraging house holders to install solar panels to reduce the amount of electricity the country uses, so that the Government can reach the reduced carbon-emission set by the EU and the Koyoto Agreement.
Why is the Government doing promoting solar like this?
As a society we are almost entirely dependent on finite resources such as oil, coal, natural gas and uranium to produce energy. Due to a massive jump in population over the last 100 years we’re well on our way to depleting these resources. We’re already resorting to highly costly methods such as fracking, to squeeze the last available natural fuels from our Earth. In 1997 our government pledged to reduce our carbon emissions by 80% by 2050 and 15% by 2020, however, since then we have only managed a 7% reduction. If we as a nation do not hit this target, we will be heavily penalised by the EU, not to mention the on-going catastrophic damage we’ll be doing to our environment. The average UK home produces between one to two tonnes of carbon per year, if every home in the UK had solar the decarbonising affect would run into 25 million tonnes of carbon reduced each and every year.
What happens is I want to move home?
The ombudsman of estate agents (OEA) says that adding solar panels to a property adds an minimum £10,000 to the value of the property, and that properties with solar sell four times more quickly than those without. Solar is therefore not only good in terms of personal investment, it’s also a great way to invest into your property. If you were to move home you could simply increase the sale price of the property to more than cover their cost, meaning you’ll profit from them directly on the sale. Since you own your system outright, you also have the option to remove them and take them to your new home.
Do I own my roof?
Unlike the ‘free rent-a-roof’ schemes, with government funded solar you own your roof and solar system outright from day one. Not only that, but you own the FIT income, export income and all the electricity your panels produce. The system is paid for out of some of this income, meaning you’ll probably never have to spend money from your own pocket.
What is the best orientation for solar panels?
The sun rises in the East and sets in the West, hence if the Solar PV is facing directly South wards the more direct sunlight it will receive, which will produce more energy. To get the maximum benefit from the solar panel system it needs to face between the South East, South and the South West otherwise its energy generation will be reduced. North facing panels will still produce electricity but at a significantly reduced rate because they will not receive direct sun light. In the UK, the best angle is between 30 degrees and 45 degrees from horizontal and most domestic roofs are built between these angles.
Does it need to be a sunny day?
Your solar panels will produce electricity on cloudy days and sunny days. The electricity your solar panels produce is based on the amount of solar UV radiation that hits the panels, not the brightness of the sun. Although sunny summer days will be more productive, solar radiation will hit your panels all year round regardless of the weather. As long as there is day light your solar panels will be producing electricity.
Will the solar panels work 24 hours a day?
No, the solar panels will only produce electricity during the day light hours, so in the summer they produce more electricity than during the winter. At night time the solar panels will not be producing electricity.
Do solar panels work in the winter?
Yes, solar panels will produce electricity from the light radiation from the sun during winter months. Even if it snows, the solar panels resonate slightly, so any snow will gently slip off the panels allowing the UV light radiation from the sun to produce electricity. As the days are shorter in the winter the solar panels will produce less electricity than in the height of summer.
What are the timescales for installation?
On visiting your home the installers surveyors will advise you on the most beneficial solar system for your home, based upon your roof space and direction, and current electricity consumption. With this information we use MCS (Microgeneration Certification Scheme) solar calculations to demonstrate the financial benefits you’ll personally look to see. We’ll then take you through the simple application process and arrange for a second survey, in order to perform an EPC (Energy Performance Certificate), roof and electrical checks to ensure you’re ready for installation.
Installation itself is only a two to three day process. Scaffolding is erected on day one, and on day two your panels and inverter are fitted. On day three any final electrical installations are completed, scaffolding is removed, and your FIT/export tariff income applications are submitted.
On completion you’ll receive all the information you require to keep a track of your energy production, usage and FIT income.
What if anything goes wrong?
Installation is fully insured and carried out by our experienced and qualified technicians, who are all MCS, & REA and fully regulated. Due to the nature of modern solar technology there is very little that’s possible to go wrong, but for peace of mind your solar panels come with a 25 year warranty, which is backed by the Renewable Energy Association (the Government watchdog). If any manufacturing faults arise within this time, any faulty panels will be replaced promptly with no cost to you.
What are the maintenance costs?
There are no maintenance costs involved in running your solar system. They are self-cleaning, have an anti-static finish to resist biological growth, and resonate slightly to remove any fallen leaves or snow that might otherwise settle on the surface. The only cost to account for is for a new inverter which might need replacing around year 15, but this is already accounted for within the personalised solar income calculations we prepare for your home.
Is there anyway I can lose out financially?
There are only a couple of instances that may make solar a non-viable option for you at the moment.
If you’re looking to move home in the next 24 months, you might want to wait to have solar installed when you move to your new home, rather than now, to enjoy the full financial benefits. If you are looking to move in the next 24 months, it does not mean that you will be financially worse off, as the solar panel system will increase the value of your property.
If your electricity consumption is so very low that you’re spending less than £30 a month you’ll enjoy limited financial benefits. But even in this case you will making your contribution to helping reducing the UK’s consumption of fossil fuels, reducing carbon emissions and contributing to reducing climate change.
Is it best to buy the panels outright?
Solar schemes are designed to benefit the millions of people who would like solar, but who don’t have the available capital for the initial investment. Therefore, we’re allowing you to pay for your solar panel system over time, with instalments using your new solar income being generate from your solar panel system and the savings from the electricity bills. This financing can put you in a cash positive situation from day one.
If you do have savings to make an investment into solar, “it’s a no brainer” as Martin Lewis (www.moneysavingexpert.com) puts it. Let’s think about it: a government guaranteed tax free income for 20 years, free electricity, adding value to your property, safeguarding yourself against increasing energy prices and protecting your environment. It really does make financial sense and it’s good for the environment.