Solar Panel Cost Price Analysis - Advantages And Disadvantages Of Going Solar

Solar Panel Cost Price Analysis - Advantages And Disadvantages Of Going Solar

The cost!

Solar panels are undeniably expensive. They cost from around 6,000 to install the smallest photovoltaic (electricity-generating) system, up to 20,000 for a very large household system. You can spend a lot more than this - farmers or large businesses may install hundreds of square metres of solar panels to reap the rewards of the government schemes on offer.

Thermal systems are a lot cheaper to install, with prices ranging from about 3,000 to 5,000.

Fortunately, there is little on-going cost with solar panels. They are known for being very robust and very reliable. They are used, for example, in airport landing lights or road signs - they work day in, day out, with very little input from those who own them. This lack of maintenance really means that the only cost of solar panels is the up-front price you pay when getting them initially installed.

The benefits!

Photovoltaic solar panels generate electricity. They are more expensive, as above, but they mean you can earn the Feed in Tariff. This means you get paid 41.3p (approximately - it's index linked) per unit of electricity that you submit to the main grid (so if you generate 20 units, and use 4 units, you submit 16 units). On average, feed in tariff payments, coupled with energy bill savings, will amount to 850 to 1,500 per year, tax free and guaranteed for 25 years.

Thermal panels generate hot water. They are cheaper, and so don't offer quite such good returns, but they are still extremely profitable. The Renewable Heat Incentive is a new scheme that will start paying out in June 2011, at an expected amount of 18p per unit generated. This, when combined with bill savings, will amount to about 450 per year, tax free and guaranteed for 20 years.

The Analysis

Both systems will pay themselves off within about 9 years. This means, after paying off the system, photovoltaic panels will earn you a further 15,000 roughly, or possibly more. Thermal panels, after paying themselves off, will earn you a further 4,500, but they are a lot less expensive to install because they have a lower price per panel. Thermal systems are also more fragile - be careful if your children play ball games around your house! This is much less of an issue with photovoltaic panels.

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