In the United Kingdom, solar panel prices keep falling. Since 2008 alone, hardware costs have decreased roughly 80%.
As a consumer, this is great. If you go solar today, you’ll pay less than you would’ve paid yesterday. And if you install panels tomorrow, your cost will be even lower.
You’d be absolutely right if you were talking about most other industries. Delaying a computer purchase or new car can really pay off. You’ll end up spending less – and you’ll likely get an even better model.
Solar power works a little bit differently.
If you lease or “rent” your panels, you get a brand-new solar installation for free. So delaying your decision doesn’t provide any solar hardware savings. And you’ll be paying for expensive grid electricity while you wait.
But if you want to own your solar PV system – the longer you wait, the more you end up spending.
Let’s look at why that is.
UK Solar Incentives Reward Early Adopters
Like most progressive countries, the UK wants to encourage widespread investment in green power technologies. Doing so reduces our reliance on imported energy. And it also helps to shrink our national carbon footprint.
This is why the UK government introduced the feed-in tariff (FiT).
Under this special program, you get paid for the solar electricity that you generate and consume. And you’re also allowed to sell your excess solar electricity into the grid at set retail rates. So you’re not simply using your solar panels to reduce your utility bill. You’re also using them to create positive cash flow.
However, incentives are designed to shrink over time. As the solar industry matures, hardware costs begin to fall. And thus, there is less need to “incentivize” consumers.
Let’s see how this works in action. Assume you have a 4kW solar PV system:
- Back in 2010 (when the FiT program was first introduced), you would have earned 36.1p per kilowatt-hour for the solar electricity you fed into the grid. And you would have been grandfathered in at this rate for the next 25 years.
- If you install that same system today, you’ll earn 11.67p per kilowatt-hour for your solar electricity. You get grandfathered in at this rate. But now the incentive only lasts 20 years.
That’s a huge difference. And next year, the payout will be even smaller and shorter.
When it comes to incentives, the lion’s share of all funding goes to early adopters. They may pay a higher ticket price for their PV systems, but their installations end up generating very handsome returns.
There’s still money in the feed-in tariff program and going solar is still financially profitable. But the money won’t be around for long. The more you delay, the less you’ll make. You might save money on cheaper panels. But in the long run, the total ROI will be lower.
One More Reason Why Delaying Your Solar Purchase Won’t Pay off
If you wait to go solar, you’re not actually saving money. That’s because your home is still reliant on the electricity grid. Every month – like clockwork – you’ll receive another utility bill.
Let’s say each bill is £100 a month on average. This means that you’re spending about £1,200 a year on grid electricity. This is money that you’ll never get back – ever.
If you wait a total of 5 years, you’ll have spent £6,000 at today’s utility rates. But of course rates keep going up, so you’ll actually have spent more.
That’s £6,000+ that you’ll never get back. You could have just as easily used that money to:
- Finance a new solar installation
- Reduce or eliminate your power bill
- Shrink your carbon footprint
- Create a new source of passive income
Request a free solar quote today.