It’s no secret that installing solar panels can dramatically decrease your monthly energy bills. But what is the payback time for solar panel installation and when will you break even from your initial investment?
Advances in solar panel technology over several years means that solar panels today are the most efficient, and cheapest they have ever been. That coupled with the high energy costs we have been experiencing the past couple of years makes it a fantastic time to invest in solar panels and offers some of the quickest payback times.
Studies show that a 4kW system in the North of England (typical for a three bedroom family home) can be paid back within less than 7 years.
Yorkshire Home Example
- Yorkshire Home 4kW System, without Battery Storage
Savings per year £930 on electricity bill
Payback time 6.9 years
- Yorkshire Home 4kW System, with Battery Storage
Savings per year £1,390 on electricity bill
Payback time 7.1 years
Lancashire Home Example
- Lancashire Home 4kW System, without Battery Storage
Savings per year £960 on electricity bill
Payback time 6.7 years
- Lancashire Home 4kW System, with Battery Storage
Savings per year £1,425 on electricity bill
Payback time 7 years
What determines return on investment for solar panels?
Several factors determine how quickly you will cover the cost of your solar panels. These include:
1. Solar panels cost
Probably the most obvious thing to factor into the payback time is how much the actual system costs you. This will largely depend on the size of the system you have installed.
One of the most important aspects is to ensure you have the right size system installed for your needs. At Eclipse Energy we will carry out a detailed technical survey to ensure the system we install will cover your electricity needs and give you the optimal return on your investment.
ECO4 grants are also available to eligible households for a range of home improvements that will help to reduce your bills and carbon footprint: solar panels are one of the eligible solutions available. The grants are available for households on a low income (under £31,000 per year) and if your home has a very low energy efficiency rating. You can find more information about this solar panel funding here.
2. Savings per year from your solar panels
Another important factor in maximising your savings is to ensure you have the right system installed in the first place. The size of the system, the quality and efficiency of the panels and whether you have battery storage will all impact on the potential savings you can make each year.
Battery storage is certainly a wise decision. This is because if you are out during the day and not back till the evenings, then you may not be able to make the most of your solar panel installation.
This is because any excess energy that is produced during the day will be fed back into the grid. This means when you get home from work, you won’t benefit from the electricity that was produced while the sun was shining.
To ensure that you get the most out of your solar panels, it’s important to add battery storage to your solar panel package. With a battery storage system, any excess energy that is generated by your solar panels during the day can be stored for later use. Ideally in the evenings or for whenever you’d like to use it. You can also see in the example above that the savings per year on your electricity bill is much higher when you add battery storage.
3. The cost of electricity
With electricity prices being so turbulent, our customers are telling us that one of the main reasons why they want to invest in solar panels is to reduce their exposure to unpredictable energy cost rises. With energy costs still very high it is a great time to invest in solar panels and reduce your reliance on high cost energy.
In addition, if your system produces more energy than you need, The Smart Export Guarantee (SEG) allows you to sell energy back to the grid. The amount you are paid varies, but high feed-in tariffs (the price you are paid) can significantly reduce payback time for your system.
What next? Can I get a free quote?
Contact Eclipse Energy today for a free no obligation survey and quote for your needs.
Simply fill out a contact form on our website or call us on 01422 414850.
We can also give you a more accurate prediction on your payback time for installing solar panels on your home.