Can I make money from adding solar panels to my home?

If the recently accelerated green technology revolution has morally encouraged you to be a part of it then, here is further reason which will add on to your impetus. While you must already be aware that fitting of options like solar PV panels help you in significantly decreasing your electricity costs, it now is joined by the scheme of the government that you get rewarded for your green credentials as payment comes for the electricity that you generate. This benefit falls under the feed-in tariff (FIT) scheme of the government and is sometimes considered to be better than investment schemes like pension.

To add to all the excitement, you should know that any returns that you make from the FIT are also free from the taxes. Thus, adding solar panels to your rooftop can certainly help you in making money. However, while this process reads extremely easy there is also some nitty-gritty facts that you need to keep in mind while deciding for this form of investment. The most important aspect to be taken in to consideration while making the purchase of solar panels is that you filter the words of the sellers and manufacturers who often claim that the increase in income would be over 8% to 10% than that happening through other investment schemes like stocks or savings. However, they often discount to take in to consideration the aspects of buying costs of the solar panels, maintenance and also the trouble rectification costs. There are other similar factors too which are listed below, that you have to take a note of while going for a money earning scheme on the basis of solar panels.

Often some conditions tend to affect the returns of FIT. These conditions are:

  1. Inflation: With the increase in this, there are chances that generation costs too will rise and the easiest way to analyse what can be the tariffs of electricity in future is by taking in to consideration that Bank of England tries to maintain an inflation figure of 2%.
  2. Hike in electricity price: If this goes high, your savings may also increase.
  3. Solar panel price: Though the costs of solar panels have reduced ever since the starting of FIT but, it is not known till when this practice will continue. Nonetheless, in the existing trend it does not take much time in getting the return against the investments of solar panels.

Conditions are also there regarding whether you are in a position to make use of solar panels. In order to make sure of this aspect, you need to see:

  1. If your house is suitable for solar panels: To get a good electricity generation, your house should ideally face southwards and should preferably have an angling of 30 degrees. In absence of these positives too, the solar panels can work however, the electricity generation would be on a lower side. You also need to ensure that your solar panels do not face any obstructions like trees, too much grime or similar things.
  2. If the cost of buying and maintenance are within your limits: Though the cost of the solar panels have come down to a huge extent but, try not to fall in to the trap of getting the panels installed for free because this may get the installation company the FIT instead of you and your only saving will be on the electricity bill. Though the panels may have a life of about 25 years but that of the inverter may not be so long and may require an expense of about £800 therefore, it’s always better to have full information about warranties and the guarantee systems.

Making most money from solar panels

Initially it was said that if the solar panel is being fitted before 31st march there was a fixed amount of 14.9p per kWh which got sanctioned for the upcoming 20 years. Going by this rate in a normal home the unused extra electricity could produce £770 every year. However, recently as more number of homes is getting solar panels fitted so; the government tariff has been reduced to some extent. Now, therefore, it is advisable that the gain of FIT should be invested in to other best cash investments so as to keeping the money rolling and increase the interests.

Comparing pensions and solar panels

Though we started off saying that fitting solar panels is a better way of making money and is advantageous over pension schemes but, as per experts it is a difficult comparison. Pension is seen as an annuity which will certainly give you an income till the end of your life and has some more benefits too. Pension experts say that solar panel incomes may always not be totally tax free while pension surely gets 20%tax benefit. Also, employers tend to contribute in the pension funds which are not done in case of adding solar panels at home. Thus, while adding solar panels may be considered as a good savings options it cannot be mentioned as a substitute to the pension scheme.

Success of solar panel option

To end the discussion, if you are still wondering that whether it is a good choice to fit solar panels or no then the easiest reply to that can be if you want only electricity saving then get the solar panels fitted for free but if your motive also includes getting money then you have first spend on buying and maintaining the panels and then hold on to your patience to see the returns coming which takes a couple of more years.