Today’s high energy prices – and how to lower them – have been the subject of conversations about water coolers across Britain. It should therefore come as no surprise that the idea of installing solar panels on roofs is making a comeback. But those who consider such lofty renewables should not count on large returns.
If electricity prices returned to historic levels, the benefits of this investment would be almost entirely due to the carbon savings. For a 4KW array in the UK, Lex estimates that this is 700kg of CO₂, or 84 percent of a home’s annual energy-related carbon footprint.
Look at the numbers that go with it. At an average cost of £1,800/KW, 4kW of solar panels would cost £7,200. On these cloudy islands, these would produce electricity for about 1,000 hours per year, or 11 percent of the time, generating 4,000 KWh of homegrown power per year for 25 years.
The problem is that not all of this would be used by those living under the paneled roof. The sun produces electricity in the middle of the day, while households tend to turn on their kettles and televisions at night.
Suppose 35 percent of the electricity from the solar panels was consumed indoors. That would cut this year’s bill from £1,063 to £640, for the average home, or a saving of £423. By 2030, however, energy prices could well have returned to pre-crisis levels, gradually reducing annual savings. would drop to £280.
The energy that is not consumed is of course not lost. It would be sold back to the grid. Different providers offer different prices for this, but they usually have a huge discount on the retail cost. A reasonable estimate for this stream of income could be £300 this year, decreasing over time to £200.
If you add up the annual savings and income from the grid and cut them back by 5 per cent, you get just under £8,000, giving a net present value of less than £80 excluding maintenance costs. For a small company, which uses power when solar panels produce it, the numbers look better. But for the average homeowner, it all looks a bit boring, albeit with environmental benefits.
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