Are solar panels a good investment?

Yes. If you buy solar panels outright or secure a solar loan, they'll give you a good return on your money. In fact, they could well be a better place to invest than a savings account. 9 out of 10 solar panel owners would recommend them to their friends and family. Solar photovoltaic (PV) systems are often marketed as a way for you to make money, as well as save on your own electricity bills. This is because you can get paid for the electricity that your solar panels produce. 

Under the government's feed-in tariff (FIT) scheme, payments are guaranteed for between 20 and 25 years (depending on when you had the panels installed), the price per kilowatt of energy is index-linked, meaning that it will rise with the retail prices index (RPI) measure of inflation annually, and all proceeds you make from the FIT are free from tax.

 Factors that affect your solar panel investment:

There are many variables that will affect the returns that you receive from the FIT.Inflation - this will increase the generation and export tariffs each year. The Bank of England's target rate of inflation is 2%, and this may be a useful figure to use when calculating what future tariffs may be.

price increases - this will impact on your level of savings on your electricity bills. The higher electricity prices go, the greater your savings. The Department for Energy and Climate Change (Decc) forecasts this at 2.6% a year until 2030.

Cost of solar panels - the cost of solar panel installation has fallen swiftly since the launch of the FIT scheme. It is not yet clear whether this trend will continue, but if it does the rates of return you receive from solar panels could be potentially higher as it takes less time to repay your initial outlay.

Lost interest - Remember than the money that you make from the FIT can only be considered as 'profits' when you have recouped the amount that you have spent installing the solar panels. Think about how much interest you are missing out on by not putting the cost of panels into a savings account, and make sure that you factor this to your calculations of your overall returns.

 How Can solar panels add value to my property?

With more and more people looking at for ways to be greener and also save money on their energy bills installing solar panels can be a good option. Although it is still a relatively new concept of getting your electricity through the use of solar panels, research carried out in both Europe and the United States show that having solar panels fitted can increase the value of your home. However be aware that it may take many years of energy savings until you recoup your initial outlay, although the pro's far out weight the con's.

A recent study conducted in the United Kingdom has shown that a third more buyers would be willing to pay more for a property already fitted with solar panels especially if you have a feed in tariff, which means you can 'sell' your extra electricity back to the energy suppliers. It is also worth bearing in mind that having solar panels fitted, and therefore saving of between £700 and a £1000 a year, depending on your energy consumption, will make your property a much more attractive proposition.

When it comes to the marketing of your property however, many estate agents do not have a great deal of knowledge on solar panels and house prices and unless a property similar to yours with panels fitted has been sold they will have nothing to compare sale values on a like to like basis, this is where you will have to step in to provide them with the knowledge they lack. It is well worth you having copies of your energy bills to hand as well as any details of feed in tariffs to show not only your savings by having solar panels installed, but also any income you may receive from the panels. You should also explain that the feed in tariff is fully transferable on the sale of the property, thus the attraction of buying a house with basically free electricity and up to a 10% income for the remainder of the contract should clearly be a great incentive to prospective buyers.

How Much Money Could I Save?

You could save up to 50% on your electricity bills by using the free electricity your panels generate.you buy your solar panels outright, you could also earn up to £455 with the Feed-in Tariff.*

Other benefits of solar panels:

Solar reduces your carbon emissions – the EST says that you can save as much as 1,200kg of CO² a year by switching to solar PV and 250kg per year if replacing gas heating with solar thermal heating. You can save 580kg of CO² when replacing electric heating with solar thermal heating.

Solar panels are low maintenance – apart from cleaning, solar panels require very little maintenance, so there are no added service costs each year. Panels are also incredibly easy to install.

Panels are long lasting – the EST reports that solar panels typically last at least 25