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Let's talk about financial returns and solar trends in 2024

Solar panels are becoming increasingly popular in the UK. Rising and unstable energy prices push people to look for more stable and sustainable solutions to meet their household demands. And with the addition of a battery and night-time low-cost tariffs, the cost of daily living can be lowered throughout the year.


Solar price trends

Over the last ten years, the cost of installing solar panels has decreased steadily - with prices 60% lower than they were in 2014. Plus, panels are more efficient as they can now transform more solar into useable energy. As an added bonus, in April 2022, the UK government cut all VAT on energy saving products such as solar panel installations to nil – saving 20% in tax.


Home battery systems

With the advent of home battery systems, one can now capture and store your own electricity for use at a later point. Without a battery, whatever you don't use immediately in the home, goes straight up the line and back into the grid. While the Feed in Tariff used to be an incentive to export, it was replaced by the Solar Export Guarantee which is variable.


If you choose to install a battery, you have the potential to reduce your consumption from the grid as you can store your own generation and, during daylight savings months (October to March) one can take the benefit of night-time charging for the next day's electricity demands on a cheap overnight tariff.


And, as of February 2024, all battery installations are zero VAT, saving 20% in tax.


Energy prices

Rising energy prices in the UK are one of the main drivers of the uptake of solar PV and home-battery storage systems. Households have seen a huge upsurge in their domestic tariffs in the last 2 years as demonstrated in the tariff below.


This table shows how much electricity costs per kWh based on location (please note these costs include VAT at 5%)

Area

Avg var unit price in 2021 (p/kWh incl VAT)

Avg var unit price in 2022 (p/kWh incl VAT)

April to June 2023 (incl VAT)

July to Sept 2023 (incl VAT)

Oct to Dec 2023 (incl VAT)

Jan to March 2024 (incl VAT)

South Wales

19.5

30

33.3

30.2

27.4

28.7

Southern England

18.8

30

33.5

30.3

27.5

28.8

Midlands

18.6

30

32.9

29.6

26.9

28.8

 

This Office of National Statistics graph shows the Retail Price Index percentage change over 12 months for electricity:

 

Return on investment

The investment on your solar installation comes both financially and environmentally as you contribute to reducing your reliance on the national grid and generating clean renewable energy.


The payback period has shortened with increasing costs of electricity; however your actual returns will be calculated upon any quote you receive from us and based upon your consumption pattern and the size of your array.


With panel lifetimes of 30 to 35 years and warranties of up to 25 years, you have long term performance and reliability guaranteed and the lifetime electricity bill savings will be considerable.


Financial Incentives

There have been two major financial incentives in the UK solar market – previously the Feed in Tariff and currently the Smart Export Guarantee.


The Feed in Tariff (FIT) was designed to support the initial update of renewable installations from 2010 until 2019 and gave payments for kW generated and exported over a 20 year period.


The Smart Export Guarantee replaced the FIT scheme in January 2020, and it rewards people for exporting renewable electricity from their home but it has a few key differences.


The FIT scheme offered the same rate for everyone (no matter which electricity supplier you were with), while the SEG tariff varies.


Different electricity suppliers offer different SEG tariffs. Secondly, the SEG tariff only pays for exactly how much you have actually exported as read through your smart meter – a smart meter is a requirement of the SEG scheme.


There are dozens of Smart Export tariffs, and each has different requirements – and even the best rates are only suited to certain types of household.


We cannot advise on your individual tariff choices but we would encourage you to have a look at current rates and consider what's available for existing customers only and exit fees.


If you live in Swansea, Neath Port Talbot, Llanelli, Bridgend, Brecon, Cardiff or Carmarthenshire and are considering a Solar PV and Battery installation for your home or commercial premises, please get in touch for your free survey today.



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