You may have seen the price of solar panels and winced at the sheer amount they can cost. We understand that they may not be for everyone, as the initial outlay can be quite high, but there is a huge range of costs that span from a slight reduction in reliance on your energy supplier to completely removing all need for one, even selling electricity back to the grid. Not only are they a great long term investment for your finances, but for the environment as well. As the world undergoes a complete overhaul of their energy generation infrastructure, every little helps. As a country and an entire planet, we are trying to reduce the amount of fossil fuels that we burn, and trying to increase our numbers in renewable generation. Read through this article and find out why your next investment should definitely be on solar panels.
Let’s talk prices
The make or break of any investment: the initial cost. How long will it take to see your initial ROI? Well here’s your answers.
The amount you spend on solar panels will all depend on a few variables. These include:
- What percentage of your electricity usage do you want to generate?
- How much space do you have on your roof?
- How much electricity do you consume per year on average?
- Do you need coverage for overnight/low light usage?
- What is the peak live usage in your house?
If you are only wanting to remove a slight amount of your reliance on your energy supplier, then you won’t be looking at an absolutely giant investment. The benefit of doing it this way, too, is that you can gradually build up your arsenal of solar panels, spreading the outlay out over time. If, however, you are looking at completely removing your reliance on the national grid, you will definitely be looking at a quite sizeable sum.
Here’s the general pricing grid for a standard monocrystalline silicon solar panel system:
|System size||Annual output||Roof space||Cost|
|1 kW||850 kWh||8 m2||£2,500 – 3,200|
|2 kW||1,700 kWh||14 m2||£3,200 – 4,800|
|3 kW||2,550 kWh||21 m2||£4,000 – 7,000|
|4 kW||3,400 kWh||28 m2||£6,000 – 8,000|
How to choose a panel system
Scenario 1 – cheap option
In this scenario, you only want to remove a small portion of your energy supplier reliance by generating a little of your own electricity. In this case, you’ll most likely only need a 1kW system. Generally, this will give you an annual output of around 850kWh, which is 27.4% of the average electricity bill. If you are paying £500 for your electricity normally, this would mean that you save £137 per year, making your annual bill £363.
If you have given an initial outlay of £2,500 for your solar panel system, this would mean you would see your first ROI after 18 years. The following 18 years would give you £2,466 in return.
If you are only removing partial reliance on your energy supplier, you will still need to be connected to the national grid at all times. This is due to the fact that you will only be running a 1kW system. In real time, you will generally use more than this through your general appliances, especially if you have multi, high usage appliances switched on simultaneously.
Scenario 2 – expensive option
In this scenario, you want to remove complete reliance on your energy supplier by generating 100% of your electricity through solar panels. In this case you would most likely need a 4kW system. This will cost you around £6,500 and will give you around 3,400 kWh of electricity per year. This is around 110% of the average household consumption. Because you are completely disconnecting from the national electricity grid, you are going to have to prepare for times of low light, like through the night. In order to do this, you will need to purchase a storage battery that will store excess electricity for you to use in times of low light. For a 6 kWh battery, this will cost you around £2,800, which brings your initial investment up to around £9,300.
If your usage is 3,100 kWh of electricity, you’re probably wondering what you are going to be able to do with the other 300 kWh? Well, you can actually sell them back to the national grid through the Government’s ‘Feed-In Tariff’. For a 4kW system at ‘medium rate’ you are going to make 3.66p per kWh, which means you’d earn roughly £11 per year, which isn’t a great deal, but it all goes towards seeing your ROI that bit quicker.
As such, with all the above included, if you were paying £500 per year for your electricity before, with the 300 kWh sold back to the grid through the Feed-In Tariff, you would be saving £511 per year, which would mean a ROI after around 18 years, thereafter seeing £10,220 ROI in the following 20 years.